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http://www.archive.org/details/cu31924018166730
SELECTIONS AND DOCUMENTS
IN ECONOMICS
EDITED BY
WILLIAM Z. RIPLEY, Ph.D.
Professor of Economics, Harvard University
SELECTIONS AND DOCUMENTS
IN ECONOMICS
SELECTED READINGS IN ECONOMICS
By Charies J. Bullock, Ph.D., Professor of
Economics, Harvard University
SELECTED READINGS IN PUBLIC
FINANCE (Second Edition)
By Charles J. Bullock, Ph. D., Professor of
Economics, Harvard University
ECONOMIC HISTORT OF THE UNITED
STATES ij6s-i86o
By Guy Stevens Callender, late Professor of
Political Economy, Yale University
SOCIOLOGY AND SOCiAL PROGRESS
By Thomas N. Carver, Ph. D., Professor of
Political Economy, Harvard University
TRADE UNIONISM AND LABOR
PROBLEMS (Second Series)
By John R. Commons, Professor of Political
Economy, University of Wisconsin
SOCIAL PROBLEMS AND SOCIAL
POLICr
By James Ford, Ph. D. , Associate Professor
of Social Ethics, Harvard University
RAILPTAT PROBLEMS [Revised Edition)
By William Z. Ripley, Ph. D., Professor of
Political Economy, Harvard University
TRUSTS, POOLS AND CORPORATIONS
(Revised Edition)
By William Z. Ripley, Ph.D., Professor of
Political Economy, Harvard University
SELECTED READINGS IN INTERNA-
TIONAL TRADE AND TARIFF
PROBLEMS
By Frank W. Taussig, Henry Lee Professor
of Economics, Harvard University
READINGS IN SOCIAL PROBLEMS
By Albert Benedict Wolfe, Professor of Eco-
nomics, University of Texas
TRADE UNIONISM AND
LABOR PROBLEMS
SECOND SERIES
EDITED
WITH AN INTRODUCTION
BY .
JOHN R. COMMONS
PROFESSOR OF ECOMOMICS, UNIVERSITY OF WISCONSIN
GINN AND COMPANY 1''^'
BOSTON • NEW YORK ■ CHICAGO • LONDON
ATLANTA • DALLAS • COLUMBUS • SAN FRANCISCO
COPYRIGHT, 1921, BY
JOHN R. COMMONS
ALL RIGHTS RESERVED
323-"
GINN AND COMPANY • PRO-
PRIETORS ■ BOSTON • U.S.A.
PREFACE
This book is a new edition, not a revised edition, of "Trade
Unionism and Labor Problems," published in 1905. As before, the
book is planned for use not only as a collection of reprints but also
as a textbook. It provides raw material, theory, and discussion. It
draws upon men of affairs and students. It is intended to' give
concrete cases and generalizations. The Introduction and Index are
intended to bring together from all these cases the items on which
generalizations may be rijade'v '. --^ :. ^'^
I have again had the valued help of Professor Ripley, editor of the
series. The liberality of the several authors, editors, and publishers
•in permitting this reproduction of their work is sincerely acknowl-
edged, as well as the help of assistants in the Department of Eco-
nomics of the University of Wisconsin — Mr. Olin Ingraham, Mr. O.
F. Carpen|ter, and Miss Miriam Gaylord — who have made wide
searches for me.
JOHN R. COMMONS
University op Wisconsin
CONTENTS
PAGE
Introduction. By John R. Commons ix
PART I. SECURITY
CHAPTER
I. Industrial Relations. By John R. Commons I
II. American Experience with Workmen's Compensation. By
Willard C. Fisher 17
III. Compulsory Health Insurance in Great Britain. By Olga S.
Halsey 45
IV. The British National System of Unemployment Insurance —
Its Operation and Effects. By Olga S. Halsey 56
V. Trade-Union Sickness Insurance. By James M. Lynch ... 71
VI. Health Programs. " By John R. Commons 81
PART II. THE LABOR MARKET
VII. Autobiographies of Floating Laborers. By P. W. Speek . . 94
VIII. The Men we Lodge. By Robert B. Brown 104
IX. Interstate Migration of Negro Population. By W. O. Scroggs 1 1 5
X. A Clearing House for Labor. By Don D. Lescohier .... 125 .
PART III. LABOR MANAGEMENT
XI. Scientific Shop Management. By F. W. Taylor and N. P. Alifas 141
XII. The Problem of Labor Turnover. By Paul H. Douglas . . . 150
XIII. Personal Relationship as a Basis of Scientific Management. By
Richard A. Feiss 165
XIV. Scientific Management and Dictatorship of the Proletariat. By
Nikolai Lenin ;....., 1 79
XV. Premium and Bonus Systems of Payment. By D. A. McCabe 199
XVI. Protection of Piece Rate. By Charles W. Mixter .... . . 205
XVII. Nonfinancial Incentives. By Robert B. Wolf . . . . . . : 218
XVIII. Apprenticeship in the Metal Trades. By M. W. Alexander. . 233
XIX. Profit-Sharing in the United States. By Boris Emmet . . , ,249
XX. Profit-Sharing in the Baker Manufacturing Company. By John
S. Baker • • 263
XXI. A Plan for Collective Bargaining and Cooperative Welfare.
Philadelphia Rapid Transit Company •. . -. ■. •• ■• ■■ .--i^<i-
vii
viii TRADE UNIONISM AND LABOR PROBLEMS
CHAPTER PAGE
XXII. Workshop Committees. By C. G. Renold .288
XXIII. Labor Administration in the Shipbuilding Industry during
War Time. By Paul H. Douglas and F. E. Wolfe . 311
PART IV. LABOR UNIONS
XXIV. Trade-Unions versus Shop Committees. American Federa-
tion of Labor 34S
XXV. Tendencies in Trade-Union Development. By G. M. Janes 349
XXVI. Amalgamation of Related Trades in American Unions. By
T. W. Glocker 362
XXVII. The Dominance of the National Union in American Labor
Organization. By George E. Barnett 386
XXVIII. The National Founders' Association. By Margaret L. Stecker 406
XXIX. The Founders, the Molders, and the Molding Machine. By
Margaret L. Stecker 433
XXX. Collective Bargaining in the Glass-Bottle Industry. By
Leo Wolman 458
XXXI. The San Francisco Building Trades. By Ira B. Cross . . 477
XXXII. Patternmakers' Local Agreements, Chicago. ByF. S. Deibler 489
XXXIII. The Settlement of Disputes under Agreements in the
Anthracite Industry. By Edgar Sydenstricker .... 495
XXXIV. Equalizing Competitive Conditions. By Ethelbert Stewart 525
XXXV. The Hart Schaffner & Marx Labor Agreement .... 534
XXXVI. American Federation of Labor Reconstruction Program . 562
PART V. THE LAW
XXXVII. Liberty of Contract. By Roscoe Pound 579
XXXVIII. Hours of Labor and Realism in Constitutional Law. By
Felix Frankfurter 614
XXXIX. Collective Bargaining before the Supreme Court. By
Thomas R. Powell 635
XL. A New Province for Law and Order. By Henry B. Higgins 667
XLI. Wage Theories in Industrial Arbitration. By Wilson
Compton 6g4
XLII. Minimum Wages for Women. By F. W. Taussig . . . 714
XLIII. American Minimum-Wage Laws at Work. By Dorothy
W. Douglas 7,8
XLIV. Operation of the Industrial Disputes Investigation Act of
Canada. By Benjamin M. Squires 770
XLV. Eight-Hour Shifts by Law. By John R. Commons . . . 807
Index 825
INTRODUCTION
Fifteen years ago Insurance and Unemployment were placed last,
now they are placed first, in this book. Western civilization is built
upon security of investments, and it is the insecurity of labor that
menaces it (Chapter I). One great nation has attempted to abolish
the system and to substitute government by organized labor. It was
only in 191 1 that American states began seriously to safeguard the
securit}^ of workers through accident compensation laws,^ but the
large amount of work yet remaining to be done in this very limited
field is shown by Professor Fisher in his chapter on the subject
(Chapter II). The extent to which England has gone in health
insurance and unemployment insurance is shown by Miss Halsey
(Chapters III and IV) ; while Mr. Lynch, former Chief of the Inter-
national Typographical Union, shows how recent and imperfect as
yet are the efforts of trade-unions in provisions against sickness
(Chapter V). The relation of insurance to sickness prevention is
shown in Chapter VI.
The instability of employment has its personal and economic
causes. How shall they be distinguished ? And, whether they are or
are not distinguished, what is the social significance? Out of fifty
or more interviews with wandering laborers had by Mr. Speek in
1914 I have selected two (Chapter VII). When you have read two
or three the others furnish very little that is new. A corroborative
view is given from a municipal lodging house (Chapter VIII) ; and
the migration of the negroes to the North and West adds its evidence
of insecurity (Chapter IX). How these workers come and go at
the employment offices, and the need of a correct national system
of offices, is shown by Mr. Lescohier from his experience in con-
ducting a federal-state office (Chapter X).
1 Commons and Andrews, Principles of Labor Legislation, p. 397. New
York, 1920.
X TRADE UNIONISM AND LABOR PROBLEMS
Management without democracy is the very despotism that pro-
vokes revolution, and the problem of industry is truly the problem
of management. Scientific management, applied to labor, passes
through two stages : the older engineering stage, that dealt with indi-
viduals, and the newer personnel stage, that deals with committees
and unions. The main points of the older scientific management,
as it affects labor, are presented in extracts from Mr. Taylor's ad-
dress to the labor organizations of Milwaukee, and the attitude of,
trade-unions is shown in the reply of Mr. Alifas, representing the
Metal Trades Union affiliated with the American Federation of Labor
(Chapter XI). Mr. Taylor's great contributions to scientific man-
agement were begun more than twenty years ago. Scarcely five years
ago did employers begin generally to install labor departments or
personnel departments in their factories. The deciding cause was
the labor turnover (Chapter XII), with its newly discovered enor-
mous expense to the employer. The discovery of the labor turnover
begins the employer's scientific study of the laborer as a man, where
the older "scientific management" had begun to study him only as
a producer.^ A notable instance is given by Mr. Feiss showing the
transition from the old scientific management to the new labor
management (Chapter XIII).
There is no automatic solution, no panacea for labor problems, and
democracy without management reverts to despotism on the mere
ground of its inefficiency. After the Soviets' had taken possession of
the Russian factories and the Bolshevik party had won over the
Soviets, the confiscation of the factories without compensation, the
expulsion of the managers, and the resulting breakdown of credit
and discipline compelled Lenin to resort to despotism in the name
of labor, to the prohibition of strikes enforced by dictatorship of the
army, to proposals of "scientific management" which he had pre-
viously condemned, and to offers of high salaries to managers if they
would return. The fundamental wrong was confiscation, on a false
theory that labor alone creates wealth, whereas credit and good faith
are equally important in the process of production (Chapter XIV).
In Chapter XV Mr. McCabe has analyzed with remarkable insight
the principal methods of bonus and premium payment. The older
scientific management, as applied to labor, achieved its success in
1 Commons, Industrial Goodwill. New York, 1919.
INTRODUCTION xi
the scientific study of work and compensation for work, but placed
too much reliance upon science as a means of restraining greed in the
conflict of capital and labor. Mr. Mixter's knowledge and expe-
rience of scientific management enables him to point out the crux
of the matter and leads him to propose a rather drastic remedy
(Chapter XVI). Mr. Wolf has made notable discoveries in scientific
methods of securing the .initiative of workers in production, which
he describes (Chapter XVII), whilq Mr. Alexander describes the
apprenticeship system of the General Electric Company, which had
its inception at their West Lynn Works and which has become the
model for many other companies (Chapter XVIII). Mr. Emmet
made a prolonged investigation of profit-sharing systems, visiting all
of the establishments whose systems he describes (Chapter XIX),
and Mr. Baker tells of the plan in the factory of which he is the
head, a plan which has carried profit-sharing over almost into pro-
ducer's cooperation (Chapter XX). By means of his profit-sharing
and cooperative-government system, Mr. Mitten converted the Phila-
delphia Rapid Transit Company from imminent bankruptcy into a
profitable business (Chapter XXI). Mr. Renold gives a systematic
and comprehensive sketch of a shop-committee system, a system
partly in operation in his works at Manchester, England, and partly
expanded to meet new conditions (Chapter XXII). Mr. Douglas
and Mr. Wolfe, of the Emergency Fleet Corporation, describe that
gigantic govermnental venture in labor management (Chapter
XXIII).
The newer scientific management, which deals more or less collec-
tively with labor, takes its new policy from trade-unionism. Chapter
XXIV shows the attitude of the American Federation of Labor
towards these veiy systems of shop committees or "employer's
unions," which are presented in the preceding chapters. That trade-
unionism is not a fixed or simple affair, but is as changeable and
diversified as the industrial and governmental conditions which it en-
deavors to control or regulate, is shown by Mr. Janes (Chapter
XXV) . Mr. Glocker shows the tendency toward closer cooperation
of unions in related trades (Chapter XXVI), and Mr. Bamett
the development of a distinctive feature of American unions — the
supremacy of national over local unions in a single trade (Chap-
ter XXVII). Miss Stecker (Chapters XXVIII and XXIX) and
xii TRADE UNIONISM AND LABOR PROBLEMS
Mr. Wolman (Chapter XXX) show the contrasted outcome of the
introduction of machinery in the relations of organized employers and
trade-unions on a national scale, while Mr. Cross (Chapter XXXI)
and Mr. Deibler (Chapter XXXII) show respectively the dominance
of unions (San Francisco building trades) and the equilibrium of
employers and employees (Chicago patternmakers) in collective bar-
gaining. Mr. Sydenstricker shows the development of the famous
Anthracite Coal Strike Arbitration of 1903, which established an
open-shop agreement without recognition of the union (Chapter
XXXIII), and Mr. Stewart shows certain effects in the bituminous
coal-mining industry of the characteristic effort of trade-unions to
equalize competitive conditions (Chapter XXXIV). Chapter XXXV
gives verbatim the shop agreement of Hart Schaffner & Marx, which
has recently (1919) been extended to cover the entire competitive
men's clothing industry throughout the principal manufacturing
centers of the United States.
The essentially conservative program of the American Federation
of Labor is brought out in Chapter XXXVI and should be com-
pared with the program of the British Labor Party readily available
in the Monthly Review, United States Bureau of Labor Statistics,
April, 19 1 8.
The transition in the juristic theories of American courts from the
individualistic notions of the eighteenth and nineteenth centuries
to the collectivistic notions of the twentieth century appears vividly
in the articles by Roscoe Pound (Chapter XXXVII) and Felix
Frankfurter (Chapter XXXVIII) of the Harvard Law School,
while the hesitancy of the Supreme Court in extending the innova-
tions to labor organizations is shown by Mr. Powell, of Columbia
University (Chapter XXXIX). The complete adoption of collec-
tivistic theories of jurisprudence is seen in detail as Chief Justice
Higgins, of the High Court of Australia, reviews the decisions handed
down by the Australian Court of Conciliation and Arbitration
(Chapter XL), while Mr. Compton analyzes the economic theories
underlying this new province of law (Chapter XLI), and Mr. Taussig
shows the economic limits within which it may be expected to be
confined (Chapter XLII).
The most complete study yet made of minimum-wage laws in
American states is given by Miss Douglas (Chapter XLIII). A
INTRODUCTION xiii
careful study, on the ground, of the operations of the Canadian
effort to limi^ the right to strike during investigation is given by
Mr. Squires (Chapter XLIV), while the editor of this book presents
considerations leading to a plan for elimination by federal law of
perhaps the most serious blot on American industry, the twelve-hour,
seven-day system of the steel industry, which, in 1919, withstood
the attack of organized labor (Chapter XLV).
These chapters are selected with a view to setting forth five prin-
cipal aspects of labor problems. The first in importance is Security
(Part I), beside which all other problems are relatively simple. Next
is the Labor Market (Part II), wherein the problem is closely related
to security. Next is Labor Management (Part III), the part played
by employers ; then the part played by Labor Unions (Part IV) ;
and finally the part played by the state through legislation,
administration, and judicial decision (Part V).
TRADE UNIONISM AND
LABOR PROBLEMS
PART I. SECURITY
I
INDUSTRIAL RELATIONS^
THERE is no automatic method of bringing about industrial
peace ; no panacea can be proposed. The socialists propose a
panacea. They consider that the conflict of capital and labor springs
from the historical fact of private property, and that if private prop-
erty is abolished and all property made common, then there will be
harmony. There will be no clashes and no conflict. They would
abolish conflict and bring about industrial peace by abolishing pri-
vate property, but in order to accomplish that result they must also
abolish liberty. As long as there is liberty there will be strikes, for
a strike is nothing more nor less than liberty to stop work and to
wait for a bargain — it is a process of negotiation, it is a scheme of
withholding your property until you can agree on the terms of
exchange.
The principal new thing about this situation in modern industry
is that it is conducted on a large scale, — much more than we have
ever known before, — and that is because there is more liberty than
has ever been known before. It has only been two generations that
the workman, under our constitution, has been free. We have a new
situation. The liberty of labor is a new phenomenon, and it should
not be surprising that we have not learned to deal either with the
institution of property or with the liberty of the workingman. They
are both new problems.
1 From an address, " Bringing about Industrial Peace," before the Conference
of the National Association of Employment Managers, December 13, 1919.
2 TRADE UNIONISM AND LABOR PROBLEMS
It would be futile to propose any single solution of the so-called labor
problem. Two things, however, may be mentioned which seem to be
impossible in the direction of a solution of the task of bringing aboMt
industrial peace. It cannot be brought about by rough methods.
We have gone through considerable discussion of compulsory arbitra-
tion, and there has been a considerable reliance on the injunction and
on threats. These crude methods are breaking down. We may put
the leaders in jail, we may prevent them from using the mails, and
we may tie up their funds ; but if beneath what the leaders are doing
there is a real grievance, a real unrest and a mass movement, we
cannot permanently suppress it. The rough method has about
reached its limit. It has failed in the different countries where it has
been tried, and recent events iri this country seem to prove that we
cannot resort to the rough method of bringing about industrial peace.
Then there is another means which has been resorted to more or
less, the method of misrepresentation. Perhaps the greatest offender
in the method of misrepresentation is the United States Steel Cor-
poration. It flooded this country with propaganda of Bolshevism, as
though the laboring people of the United States, who are demanding
the abolition of the twelve-hour day and the seven-day week, were
animated by the desire of taking possession not only of the factories
of the Steel Corporation but of all factories. Apparently they suc-
ceeded in that propaganda and misrepresentation. You find through-
out the country nolj only an unrest amongst laborers but a decided
unrest amongst employers. Employers have become easy marks-
anybody who has a panacea can come to an employer and lift $ioo
out of his pocketbook by offering him a remedy against Bolshevism.
The unrest which has been stirred up amongst employers by the
Steel Corporation in its wonderful propaganda is a menace to the
industrial peace of the country. Neither rough methods nor mis-
representation will permanently bring about industrial peace.
If we cannot rely upon these methods of the past, what is going to
be the method and what can we offer as a remedy in bringing about
industrial peace ? In my judgment the method is one not of a year
or two years but of many years. It is the method of prevention.
We must investigate the conditions which cause this industrial
unrest and we must prepare in advance to remove the conditions
which cause conflict to waken up.
INDUSTRIAL RELATIONS 3
Last February the administration at Washington might have
known what was going to happen in the coal-mining industry. The
administration had all of the means of knowing how many hours'
work the men were getting in the week ; they had the means of
knowing that after the armistice was signed employment fell off;
that during the winter months and on through the summer the men
were not working two thirds of the time, or even half time ; that in the
winter they were compelled to sell their Liberty Bonds, they were
compelled to eat up their savings, and there was great suffering in
many parts of the mining districts. Anyone who attended that con-
vention of the mine-workers' union in Cleveland last summer and
saw those twelve hundred mine-workers coming up out of the ground
in one great solid, unanimous opinion could not for a minute conceive
that their unrest was the work only of agitators and leaders. They
were not officials, they were not the salaried leaders defending their
jobs. They were the actual mine-workers sent there by the local
unions to protest against conditions.
They made a great statistical blunder and perpetrated an eco-
nomic fallacy. Their statistical blunder, owing to the lack of proper
statistical information, led them to ask for an increase of 60 per
cent in their wages. They figured it out accurately, according to
the light which they had. Their statistician had figured that their
cost of living had gone up about 104 per cent, whereas, as a matter
of fact, it had gone up only 80 per cent — they had taken wholesale
prices rather than retail prices. They figured their wages had gone
up 44 per cent and they wanted another 60 per cent, and, added
to the 44 per cent on the 19 14 basis, that would have brought them
up exactly even with the cost of living.
Their economic fallacy was based on the idea that by restricting
the hours of labor to six they could force industry to equalize em-
ployment throughout the year. The impression was generally spread
over the country that what they intended to do was to restrict the
output by cutting the hours from eight to six. We all know now
that what they were really trying to do was to distribute the work
evenly throughout the year. A man working in a coal mine often
does not know until the whistle blows in the evening whether there
will be work tomorrow or not. When he goes to work in the morning
he does not know whether he will have two, three, four, five, or
4 TRADE UNIONISM AND LABOR PROBLEMS
eight hours of work. Living in this state of uncertainty, not simply
for the year but for twenty or thirty years, the mine-worker has
been brought up on the conviction that each time he reduces the
hours of labor he forces the employer to distribute the work more
evenly. He is not asking for less work, he is asking for steady work.
The administration at Washington should have known these con-
ditions and circumstances. They had the correct statistical informa-
tion, they knew the conditions in the industry, and at the time when
the administration hfted the ban on the operators' price of coal they
should have negotiated with the operators to bring about an adjust-
ment of wages so as to meet accurately the cost of living.
This fluctuation of prices, this changing cost of living, has been
going on for an entire century. It is not a new phenomenon. One
hundred years ago, at the close of the Napoleonic Wars, we had the
same situation. We had it again in the thirties owing to wildcat
banking at that time. We had it during the Civil War, and now we
have it repeated. We have had in all of these periods quite the same
crude explanation of the facts — the rise of prices has always been
charged up to monopolies and profiteering. It has now been charged
up to restrictions by the laborers. It may be true, and no doubt it
is, that there is profiteering and that there is "laying down" on the
job by wage-earners, but if we try to figure out how much influence
either profiteering or restrictions by labor has on the elevation of
prices, I think we will have to conclude that if we could stop all of
the profiteering and stop all of the restrictions by labor, it would not
affect the total result very materially. Profiteering and restrictions
are mainly results, not causes, of rising prices. The high cost of living
is something that neither the employer nor the employee can prevent.
It does not come from anything under the power of capital and labor
to overcome, and yet it is the one great cause of uncertainty and
unrest, and has been for a whole century.
The fluctuation of currency is the greatest of all the labor problems.
It throws a red brick continually into capital and labor. The first
great method of importance in bringing about industrial peace is the
stabilizing of the dollar. If we could have a system of currency in
which the great price movements which have been occurring in all
these years could be stabilized, we would do more to stabilize in-
dustry, to bring about industrial peace, than any other one thing.
INDUSTRIAL RELATIONS S
In times of rising prices we have restrictions, aggressive movements ;
in times of falling prices we have unemployment, bankruptcy, and
depression. The whole situation is rendered unstable, and we are
living continuously in a period of uncertainty.
I know of no way of reaching that question, which to me seems
the most fundamental of all, except that remedy proposed by Irving
Fisher, of stabilizing the dollar.^ Yet we know that a remedy of this
kind will not come very soon. Consequently the best that can be
done is for employers and employees to adjust themselves to the
situation. Capital and labor alone cannot prevent this fluctuation.
There is, apparently, only one great constructive plan in this
country on a national scale which has attempted to bring about
industrial peace by meeting the situation of the currency, and that
is the plan which is now being worked out in the book and job print-
ing business with the labor organizations. With the increased cost of
living, the printing business did not raise wages. They had their
agreements that had not expired and did not provide for raising
wages. But in two or three places in the country— in New York,
Chicago, and Seattle — the local unions violated their agreements and
went after the increased wages by direct action. And, although the
employing printers contended that they could not pay the increase,
yet when they came to it they not only paid the increase but they
paid more than the increased cost of living. The only places in the
United States where labor actually secured, in the book and job
printing business, an increase in wages corresponding to the increase
in the cost of living were where the local unions defied their own
national unions. What a lesson that was to labor in the United
States! The only way we can keep up with the cost of living is by
violating our agreements, by resorting to methods which we have
promised not to adopt, by defying our own organizations.
Consequently we find that the book and job printing business has
come together on a national scale and is in the process of adopting
the principle that employers will not wait until demands and strikes
are upon them, but will automatically change the level of wages as
the changing price curve moves up or down. Every six months, or
at periodic intervals, a change is proposed to be made throughout the
entire United States, on the initiative of the employer— not waiting
1 Fisher, Stabilizing the Dollar. New York, 1919.
6 TRADE UNIONISM AND LABOR PROBLEMS
for labor to make the demand, — thus heading off this unrest in
the localities. In doing that the employing printers throughout the
United States for the first time have joined with the national or-
ganizations of labor where their interests are alike, and we see on a
new national scale the largest expansion of scientific management —
capital and labor combining to look ahead to the future in order to
prevent industrial conflict by remedying the conditions in advance.
Of course we have the objection that if an increase in wages causes
prices to go up, and if an increase in prices provokes a further de-
mand on the part of labor for wages to go up, we have that vicious
circle. But that vicious circle cannot be avoided as long as we have
inflation of currency. If we had a stabilized dollar, no matter what
the relations are, the prices and wages would be stabilized in ac-
cordance with the general level of the price curve. It is a mistaken
view that it is this pyramiding of wages and prices that keeps prices
up. It is not the pyramiding of wages and prices, it is the inflation
of the world's currency ; and no matter what adjustment might be
made between employers and laborers, a correction of the currency
of the world could stabilize prices and prevent the need of this
pyramiding. That is the first and most important fundamental
condition to be recognized in the conflict of capital and labor, as it
appears to me.
What about restrictions of output? Everybody knows that in
good times working people "lay down" on the job, no matter
whether organized workers or not. People do not work as hard in
good times as they do in hard times. We have the curious paradox
that in good times, when we ought to increase the output, labor
restricts the output ; and in hard times, when we don't want people
to work so hard and increase the supply of production, then they
work the hardest. A business man does not conduct his business
in that way. In good times, when prices are going up, he tries to
increase his output ; in hard times, when prices are falling he tries
to restrict his output— he does not buy more than he can sell In
other words, labor works just the opposite of business. In good
times, when prices are up, then is when labor "lays down" on the
job and refuses to increase the output and keep up the supply In
hard times, when the demand has fallen off, then is when labor works
the hardest and turns out the most production. It surely seems that
INDUSTRIAL RELATIONS 7
we have been going on a wrong hypothesis in dealing with labor.
It works out all right in dealing with marketing and commodities,
but labor seems to work just the opposite.
We have been going on the theory that in order to get efficiency,
in order to get output, in order to get laborers to work, there must
be some kind of a penalty held over the workingman — the penalty of
unemployment, the penalty of being discharged if he does not work,
if he does not do his duty, if he is not on the job. It is then
that he suffers the penalty of being discharged from his job. Our
method has been the rough method of disciplining labor by the
penalty of unemployment.
That penalty does not work in good times ; it works too much in
hard times. In good times the workman is not afraid of unemploy-
ment. What 's the use ? If he is discharged, he can go across the
street and get another job. In hard times, when we don't want so
much produced, then he works hard because he is afraid of unem-
ployment and cannot go across the street and get another job.
The psychology of labor, both in good and in hard times, is funda-
mentally the psychology of a class of people whose life is insecure,
who are subject to rough methods of discipline. We cannot under-
stand the problem of dealing with labor unless we understand that
fundamental fact of insecurity of employment. It is just as vicious
in good times as it is in hard times. In good times the workingman's
high wages are an injury to him ; he gets too much money, and he
does not know what to do with it and spends it extravagantly, —
burns it up, — and when the hard times come he has nothing to fall
back upon. The fluctuation of earnings— great earnings in good
times, falling off in hard times — is demoralizing to the character of
working people.
If we have to depend upon the rough method of discharge for get-
ting efficiency, then we are going to keep labor continually unstable
and uncertain, and the character of the workingman will not rise to
the occasion of modern industry.
Modern capitalism is not based upon the ownership of physical
things. We might see much of our machinery and our buildings de-
stroyed by earthquake or war, but we all know that if we retain the
credit system it will not be very long until all of our machinery and
buildings are restored. We usually consider that the production
8 TRADE UNIONISM AND LABOR PROBLEMS
of wealth is brought about by the union of capital, management,
and labor. Capital is the physical machinery and the tools ; man-
agement is the organizing element ; labor produces the physical
product. The three must, indeed, be combined, but the greatest
instrument of production — the thing that really produces modern
wealth — is not physical things, is not labor, is not management;
it is confidence in the future, it is a credit system based on
the expectation of industrial continuity — an expectation that debts
will be paid.. The capitalistic system is security of expectations.
If we could not offer security to the investor, we might still have
production of wealth. Physical things, management, and labor might
go on producing wealth, but you know how much wealth could be pro-
duced if it were not for our credit system. The production of wealth
would fall back to what it was in colonial times ; nobody could ship
his product to anybody else, and we would not trust one another.
Capital is based upon security of expectations. The investor has con-
fidence that his investment will be returned to him, that promises will
be kept. That is the great producing factor in modern industry.
Now capitalism is to blame because it has not offered, as yet, to
labor that security of the job which it has offered to the investors in
the security of their investments. Capitalism is threatened because
it has not furnished the working people a similar security to that
which it has furnished to the investors. The workingmen are getting
the idea throughout the world that the elements that produce wealth
are the workingmen and the management ; and we have the Plumb
plan, in which two million workers in the United States come
forth to oust the credit system and let simply management and labor
produce the wealth of the country. They would destroy the thing
upon which the credit of the railroads is built, because they think
that the producing elements are management and labor.
Well, that is much the same idea that they have in Russia, and
that is the fundamental notion of modern laboring people spreading
throughout the world. They do not appreciate that modern capital-
ism is based on faith in the future ; they have not themselves been
given that same security. Capitalism to them is autocracy and in-
security. They have tried to get security by rough methods. Trade-
unionism, closed shop, union shop, and so on are their methods of
obtaining security of the job. Not until the capitalistic system, not
INDUSTRIAL RELATIONS 9
until the great financial interests that control this country, have
learned that it is just as important to furnish security for the job as
it is to furnish security for the investment will we have a permanent
provision for industrial peace.
We have only begun in recent years to try to establish security
of the job. The first effort made was eight or ten years ago in the
workmen's compensation law — the accident-compensation law. That
was the first comprehensive effort to establish security for the job.
Unemployment no longer damages, as it did, the man who is hurt
during employment. The next step is probably the similar treatment
of sickness insurance.
In the case of accident compensation this curious thing developed :
employers vigorously fought the legislation at first because it was
going to increase the cost of production and the expenses of business ;
but after the law was enacted and the employers were compelled by
law to pay compensation, they introduced a new element in industry
— they introduced a safety expert. They developed a new depart-
ment of industry. I knew of an establishment that figured that if
the compensation law was enacted, their premium on insurance would
increase from $5000 to $22,000 a year. That was what they were
told by the insurance people and by their claim agent, and they were
dreadfully scared. After the law was enacted, however, they changed
their claim agent into a safety expert, and the very first year, instead
of paying $22,000 for compensation, or even $5000, it cost them
only about $2500.
The accident-compensation law has accomplished the first little
step toward giving security to the job. It has shown that the only
way to establish security is by making it financially profitable. And
so we shall make it financially profitable to business to eliminate
unemployment on account of sickness, on account of changes in
seasons, on account of fluctuations in business. Labor can never ac-
complish this result. The only possible accomplishment of it will
come when the employer puts in his personnel department, his
personal-relations department, his safety men, his welfare men, and
his men who stabilize employment. We know that employers who
have done this have made their jobs regular — they have regularized
their work, and there is good reason to believe that all can do it if
the inducements are adequate.
10 TRADE UNIONISM AND LABOR PROBLEMS
There are many ingenious methods that can be adopted. Yet it
appears to me that we cannot get the large capitalistic interests
awake to this subject of stabilizing employment unless the gov-
ernment takes hold of it. If we had a tax on unemployment of
$1 a day for every man who is laid off, we should soon find that
capitalism would put its personnel experts at work to regularize the
business, and they would have no tax to pay, because they would
have stabilized the work.
The fundamental lines along which industrial peace is to be brought
about are those which go to the psychology of the workingman and
substitute in his mind something like that which we have in the mind
of the investor. The employer who is willing to pay compensation
for unemployment, who is willing to furnish what the workingman
needs, knows that the workingman needs to have something to wait
for and needs to have confidence in the future.
I visited a number of establishments this summer, making a
special study of the circumstances under which efficiency had been
increasing or decreasing, and found that notwithstanding some were
complaining about labor's laying down on the job, yet in particular
establishments the output had increased. What is the secret of it?
It seems to me that in all these cases this was found to be true!:
a new principle had come into the business, — management had ob-
tained a new view of labor, — and I may contrast it by the history
of scientific management.
Mr. Taylor, as you know, started his wonderful development
in scientific management by offering to the industrial workers a
chance to better their condition. He appealed to the individual
worker. But the modern scientific management of personnel appeals
to the collective interest of all the workers in the business. It is be-
ginning to recognize that the workingman does not want to have high
wages for himself if by doing so he seems to deprive his fellow
workers of high wages. It is as though we are upon a ship on the
ocean— there is only a limited amount of products to go around;
the man who saves his own life and lets the others go down cannot
live with his fellows afterward. So it is with the modern working-
man ; he is continually haunted by the feeling that there is only a
limited product to be distributed, and consequently even the better
men, when appealed to individually to increase their wages, cannot
INDUSTRIAL RELATIONS ii
stand it to go ahead too far amongst their fellow workers. If they
get out of the class of ordinary workmen and become foremen and
superintendents, that is one thing ; but to stay in the ranks of labor
and to earn much more than the others seems to be taking bread out
of the mouths of their fellow laborers.
Modern management is learning to deal collectively with the work-
men in the shop ; whatever one worker does to benefit that shop will
benefit all of us — we are all going to be lifted up together. We are
not going to set workingmen competing with each other and try to
get one ahead of the others and appeal only to his self-interest. That
was all right in times past, when the world seemed to be full of un-
occupied resources, when anybody could go out and get all he wanted
and yet not take it from anybody else. Now, as we are getting closer
together, as business is getting on a large scale, the man who gets
more for himself seems to be taking it from the others, and so we
have that solidarity of labor which is a psychology that must be
recognized by all management.
This psychology should be combined with the idea that the busi-
ness itself is the place where we shall have our living — our confidence
in the future. I visited Mr. Ford's factory recently. Mr. Ford does
not have an idea there of cultivating the efficiency of his laborers.
His great profit-sharing system, as you know, is a distribution not to
men who are efficient, in order to increase the output, but to men
who lead a "clean and wholesome" life — they get the profit. The
men who do not lead a clean and wholesome life do not get profits.
John D. Rockefeller, the senior, says that Ford's plan is the indus-
trial miracle of the age. Well, the Ford plant is the psychological
miracle of the age. It has not gone after efficiency first ; it has gone
after the clean and wholesome life. Efiiciency is a by-product of the
clean and wholesome life.
When I visited the White Motor Company I was impressed with
the fact that it is not in detailed methods of piece and bonus pay-
ments that they try to reach the individual and increase his pro-
duction, but it is in creating the conviction in every man in that
industry that that is his industry, that the future of that concern
is his future. Thinking and planning for the future is the White
Motor's big efficient machinery of production, just as security for
investment is. Get capital to think of the security of the job and it
12 TRADE UNIONISM AND LABOR PROBLEMS
begets efficiency of labor. We must look upon efficiency as a by-
product and not as the main thing in industry.
It seems to me, to transfer this to the national scale, here is where
capitalists have fallen down. Mr. Gary has fallen down representing
the capitalistic system ; labor organizations have fallen down ;
Mr. Gompers, representing trade unionism, has fallen down ; the
politicians have fallen down in bringing about industrial peace.^
Where shall we look for any people in the United States who have
the preventive idea ? who can look forward and plan for the future ?
who will base the bringing about of industrial peace on knowledge of
labor and on knowledge of security? We must look for it inplacing
the personal-relations department ahead of the engineering, com-
mercial, and production departments of industry. It is only in the
personnel department that we find the beginnings of true scientific
management- — the department of scientific human relations, which
appreciates and knows what are the fundamental things for labor's
efficiency. If we can have our modern industry conducted as a
personal-relations industry, above the commercial department,
above the engineering department, above the manufacturing depart-
ment, above the production department, and if we could bring to-
gether on a national scale, instead of our great financiers, instead of
our great labor unions, instead of our politicians, — if we could bring
together those who are developing the modern personal-relations
method, then I think we might work out some plan for bringing about
industrial peace.
Yet it is because, and to the extent that, personal-relations depart-
ments are coming to recognize some form of collective bargaining or
collective government that they are fit to come forward as national
leaders at this time. Socialism has no need of personal relations in
management, because, according to Marx's theory, "social labor
power" moves on to its historic goal regardless of the individual
will. Capitalism had no need of personal relations, because capitalism
was but adjustment to the laws of demand and supply, over which
individuals and classes have no control. But with our great cor-
porations and associations on the one hand and organized labor on
the other it is only by a science of collective management that capital
1 Referring to the first Industrial Conference called together by President
Wilson, which split on the question of collective bargainmg.
INDUSTRIAL RELATIONS 13
and labor can work in harmony and security. It becomes then a
science of political economy as well as a science of business.
The science of political economy began with individual bargaining.
Adam Smith, its founder, in 1776, laid its foundation, and in an
interesting and important chapter pointed out the great evil of
collective action. One of the most serious things, he thought, that
industry had to contend with was association of capitalists. The
great evil of an association of capitalists was that when they combine
they deprive the minority of their liberty. The majority vote of the
association binds the minority. Consequently the combination—
the association of capital in corporations — was condemned by him
as intruding upon the liberty of the individual. He even went so
far as to condemn social gatherings of merchants, for he said : " When
your merchants come together, what does their conversation turn
to? It does not turn to increasing efficiency. It turns to hatching
up some conspiracy against the public."
Adam Smith started political economy upon the individualistic
basis. He spoke at a time when industry was throttled by guilds
and governments. The French Revolution overthrew that system.
The French Revolution was an attack by the small manufacturers
and merchants, the small capitalists and workers, against the govern-
ment and the governmental regulations of the time. One of the
great statutes of the French Revolution was that statute which pro-
vided that no association, either of merchants, manufacturers, or
laborers, should be permitted. That statute stood on the statute
books of France ui\til the year 1884, when it was finally repealed.
Meanwhile, there had grown up, unknown to Adam Smith, unknown
to the French Revolution, our modern system of corporations. When
it came to the middle of the nineteenth century, about the year 1850,
for the first time, with our general incorporation laws, it was made
possible for any association of capitalists to come together and form a
legal association to conduct their business. Prior to that time the only
way in which you could form a corporation was by going to the
legislature and asking for a special charter. With the general incorpo-
ration laws, beginning about 1850 in this country, it became possible
for any group of capitalists to get together, simply file their articles
with the secretary of state, and become an association. That violated
all the principles of political economy and the French Revolution.
14 TRADE UNIONISM AND LABOR PROBLEMS
The modern business world is conducted upon the principle of as-
sociation, of requiring the minority in a group to submit to the will
of the majority, and if one person happens to be the principal stock-
holder, then all the minority obey the will of that one person. We
are not living in the time of the French Revolution ; we are living
in the time of the Russian Revolution.
It differs entirely from the French Revolution in that it is based
upon the principle of government by organized labor — a scheme
first propounded seventy years ago by Karl Marx, that this capital-
istic system must be overthrown and that now was the time for
workingmen of the world to unite. Russia has given us the fruition
of that theory, based upon the organization of labor.
Our Western civilization today is confronted by an entirely dif-
ferent situation. At the time of the French Revolution we had a
new world opening up to which the oppressed peoples might escape.
This has been going on until at the present time this new world is
pretty well occupied. Great corporations have sprung into being. The
natural resources are controlled, and if the workingman is to have
any opportunity, he cannot secure it by going west, by escaping from
Europe and settling on the soil of America. When he escapes from
Europe he comes to America and works for a corporation. Capital
has associated — the law has made universal the right of association
on the part of capital. Thus the workingman coming into this new
world, with the resources occupied, without any homestead law or
opportunities to become independent, can secure his advance only
as he works with the thousands for the corporation.
Furthermore, the small employers who are not formed in corpora-
tions are more and more uniting in associations. We have all kinds
of associations — associations of farmers, associations of merchants,
associations of independent manufacturers : they are formed for
all classes and purposes and they are recognized in law. They are
created into employers' associations, operating with a formal policy
regarding labor, so that the modern workingman is confronted with
a situation where associated effort is the rule of the day, where
employers have compelled employees to submit their individuality
to the control of the majority in these associations and corporations.
The workingman of modern life, then, is imbued largely with
these ideas, which have reached their disastrous victory in Russia.
INDUSTRIAL RELATIONS IS
He is welcoming the idea, at least toying with the idea, that by group-
ing together in associations he may gain from his employers that
which he cannot get by escaping to the natural resources of the coun-
try. And whether we will it or not, whether we wish for it or not,
the workingmen of modern life, in so far as they are capable of
organizing, are doing so.
It is not a theory of collective negotiation or collective govern-
ment that we are confronted with ; it is conditions and facts. Work-
ingmen are combining and cooperating more and more ; and the
more they get intelligence, the more they get Americanized, the more
will they combine. In this combination of workingmen they attempt
to accomplish through collective power what they cannot accomplish as
individuals. The feeling of solidarity is arising amongst them — the
feeling that for the large majority there is no opportunity for them-
selves as individuals except as they move upward in a mass, that if one
individual outdistances the others he is injuring the others, but that
if he uses his influence in bettering his own condition so that, at the
same time, it will lift up the others, then that is a desirable thing.
This feeling of solidarity, this feeling of unity, is forcing him, as it
were, throughout the Western world to assert what collective power
he can. The employer who starts out with an idea of individual
bargaining is confronted by the fact that he perhaps will not have
a chance to enforce his ideas.
There are two classes of employers, apparently. There is that
class of employers, corporations, or individuals who conduct their
business in such a superior fashion, who have such personal relations
developed with their employees, that labor has no desire to force a
collective arrangement upon them. There is another class of em-
ployers who, either through their own attitude or through the stress
of competition, are not free to deal with labor on these higher
personal relations. Labor organization has not come into existence
at all to deal with that first class of employers. It has not been
provoked in order to overcome any resistance on their part. It has
come in solely in order to use coercion with reference to the other
class of employers. The collective dealing which we are discussing
is not to be considered universal ; it is not to be considered as apply-
ing to all employers or all capitalists. It applies only to those who
need it because they will not or cannot meet new conditions.
1 6 TRADE UNIONISM AND LABOR PROBLEMS
Labor organization, however, has this defect : when once it has
started, when once it has begun to apply, it stretches out to reach
all employers in a competitive area. By force of circumstances it
brings the others into the fold. A small number of employers or
corporations may be above the level, but a large proportion are in
that field where there is a contest and a conflict going on.
If we' let our vision pass from the time of Adam Smith and the
French Revolution, when individual bargaining was the ideal of
political economy, down to the time of the Russian Revolution, when
these very corporations themselves, although they have become enor-
mous, are treated as though they were individuals, — if we allow our
view to pass over this century, we shall widen our comprehension and
not only have a place for the individualism which produced the
French Revolution but have a more intelligent method of meeting the
collective idea which has shown itself in the Russian Revolution.
John R. Commons
University of Wisconsin
II
AMERICAN EXPERIENCE WITH WORKMEN'S
COMPENSATION^
EXPERIENCE under the American compensation statutes has
justified in fair measure the hopes and claims of those who have
advocated the legislation. It has not been millennial. But it has real-
ized no small part of the advantages which were predicted. So much
may be stated with entire confidence and after due allowance for the
present incompleteness of definitely relevant data.^ In fact, a reason-
ably confident conclusion of that character might be reached without
examining any of the detailed reports upon the practical working
of the statutes and with only a knowledge of the rate at which the
compensation system has been extended from state to state. Ten
years ago the early and ready acceptance of workmen's compensation
in other lands was urged as a strong argument for the enactment of
compensation legislation in this country. It was pointed out that
within a quarter century the newer principles and policy for the relief
of employees injured in industry had been adopted in some forty
foreign jurisdictions, including all of the industrially important ones,
and that, once adopted, nowhere had there ever been any serious
proposal to give them up.
But foreign readiness to enact compensation laws has been more
than matched in the United States. It is not yet nine years since
the first of the really effective American workmen's compensation
statutes were enacted.-'' Yet such laws now have been enacted in
forty-two of the forty-eight states and in Alaska, Porto Rico, and
Hawaii. Only the District of Columbia, North Carolina, South
iProm American Economic Review, Vol. X (1920), pp. 18-47.
2 Conditions growing out of the war have delayed and even suspended the
publication of data in several of the states, including some of the largest of
them, whose experience would be most instructive. Here may be mentioned
New York, Pennsylvania, Ohio, and Illinois, as well as a number of others.
31n Kansas and Washington on the same day, March 14, 1911.
17
1 8 TRADE UNIONISM AND LABOR PROBLEMS
Carolina, Georgia, Florida, Mississippi, and Arkansas are still without
compensation statutes. And a late appropriation for the District of
Columbia brings all public employees in that jurisdiction under the
provisions of the federal workmen's compensation law. It is not
credible that the states would have taken action so speedily, one
after another and in full knowledge of what had been done elsewhere,
often in adjacent states, except upon conviction that the action taken
was of proved wisdom. Doubtless none of the tardier legislatures
knew every effect of the earlier enactments. Nobody knows as much
as that even now. But they did know, through universal report and
belief, that of evil effects there had been as good as none and that
general results had been eminently satisfactory. And upon such
knowledge they acted.
There is other general evidence of the same presumptive character.
As in foreign lands, so in America there has been never a voice raised
for the repeal of the statutes. Rather the tendency of legislation
everywhere has been to go farther, to strengthen and improve the
first laws. The field of the acts has been broadened somewhat by
the inclusion of additional workmen. Rates of compensation have
been increased in various ways — by higher percentile ratings upon
wages, by raising the fixed maxima, by shortening the waiting periods,
by extending the duration of the payments, by more liberal provisions
for medical care, and in still other minor ways. The original limita-
tion to accidental injuries has befen done away in a few states.^ The
certainty of payments to injured employees has been made greater
by stricter requirements of insurance and by corrections of adminis-
trative procedure. And the simpler and more summary administra-
tion by boards or commissions, rather than through the courts of
law, has been increasingly favored.
By many tokens employers have shown their approval of the
system. There are, to be sure, some regrettable failures of the
optional statutes to win acceptance by employers.^ But these are
not very numerous, relatively. Much the larger numbers of the
employers affected have accepted their new obligations cheerfully.
In the states in which the employer's acceptance of the optional
1 Diseases now are included in California, Connecticut, Massachusetts, North
Dakota, and Wisconsin.
2 See U.S. Bureau of Labor Statistics, Bulletin No. 240 (1918), p. 34.
WORKMEN'S COMPENSATION 19
statute is presumed, in the absence of his notification to the contrary,
positive rejections have been few. And in states with optional stat-
utes there have been a great many purely voluntary elections of the
compensation system by employers who have been under no con-
straint of fear that they might have to face suits at law without their
old-time common-law defenses. So in California in 19 18 there had
been more than 20,000 such voluntary elections which had been
formally notified to the Industrial Accident Commission, and in
addition to these an unknown number of others which had been
legally implied by the taking out of compensation insurance.^ And,
in fact, a good part of the liberalizing amendments to which reference
has been made have had the support of employers, or even have been
proposed by them.
Employees have become even more cordial than employers in their
approval. Unorganized laborers, of course, on the farms and else-
where, never were on record, or even heard, as to their wishes about
workmen's compensation. But organized laborers, as a rule, were at
first skeptical or positively hostile. It was but natural that the
representatives and spokesmen of the labor unions, knowing little
about the measures proposed for their avowed benefit, and by
outsiders at that, should be doubtful of the real advantage to them-
selves! The verdicts for large sums now and then won in personal-
injury actions loomed in their minds as the grand prizes of the lottery
loom in the minds of ticket-holders. And they did not appreciate
fairly the fact that the compensation awards, limited although they
might be, would come very much oftener than the rich damage ver-
dicts. In 1909 Mr. Samuel Gompers, as president of the American
Federation of Labor, declared his preference for an improved em-
ployers' liability law. Two years later the president of the Con-
necticut Federation of Labor appeared in his official capacity at a
legislative hearing to oppose a pending workmen's compensation bill,
announcing that the organized laborers of Connecticut wished rather
a simple abolition of the common-law principle of the fellow servant.
1- Report of the Commission for 1917-1918, p. 6. Hereafter in tliis article
definite references usually will not be cited for statements based upon official
reports of the various compensation boards and commissions. In most cases
the statements themselves will indicate sufficiently the source of the authority,
the state, and the year, and any interested reader will find the page without
difficulty.
20 TRADE UNIONISM AND LABOR PROBLEMS
In Illinois the opposition to early proposals of workmen's com-
pensation had some of its sharpest, even bitterest, expressions by-
organized laborers. But now, after a few years of experience with
compensation, laborers, both organized and unorganized, are gen-
erally enthusiastically in favor of it, not necessarily in its present
typical form and with its commonest limitations, but certainly as a
general principle and in contrast with employers' liability. Perhaps
the great railway unions, to whose highly paid members the modest
maxima of the ordinary compensation awards appear particularly
unjust, are the only important bodies of laborers who cannot be
considered as now having renounced their former hostility. . . .
But much more to the point, under the American system of govern-
ment, is the fact that the constitutionality and the general legal
propriety of workmen's compensation may be said to be now definitely
established — established, that is, beyond any possibility of unsettling.
For they have been affirmed abundantly in the highest courts, both
state and federal. Early unfavorable decisions in Montana, New
York, and Kentucky, and in lower courts elsewhere, have been made
quite negligible by changes in the provisions upon which they turned,
by constitutional amendments,'^ and by the accumulated weight of
later favorable opinions. Of these there have been a great many,
perhaps fully half a hundred by now, which may be said to have
covered questions of constitutionality, sustaining the statutes of more
than a score of the states, some of them of the so-called optional type
and some directly compulsory.^ It is true that the scope of some of
1 As in New York, Ohio, California, and Wyoming. Tiie New York amend-
ment of November 4, 1913 (Article I, Section ig), is of general interest in politi-
cal science, as a perfect illustration of the popular recall, or reversal, of a judi-
cial decision. Both in form and in substance it is nothing else. It made not a
word of change in existing provisions of the constitution, but merely declared,
in effect, that the decision of the Court of Appeals in the Ives case — which
had annulled the compensation statute of 1910' — ^^was reversed, or recalled. It
enacted simply that "nothing in this constitution shall be construed to limit
the power of the legislature to enact laws for" [compulsory workmen's com-
pensation].
^Optional: Illinois, Iowa, Kansas, Louisiana, Kentucky, Massachusetts,
Michigan, Minnesota, Montana, New Hampshire, New Jersey, Ohio, Oregon,
Pennsylvania, Rhode Island, Texas, West Virginia, Wisconsin. Compulsory :
California, Hawaii, New York, Washington, Wyoming. Perhaps other states
should be added. It would be gratuitous, and tedious also, to keep the list
up to date.
WORKMEN'S COMPENSATION 21
the favorable judicial opinions is not quite so comprehensive as at
times is assumed and that, therefore, their weight is not quite so
overwhelming as the list of states might indicate.^ But none the
less it is now entirely safe to conclude that no attack upon any essen-
tial feature of either optional or compulsory compensation statutes
will prevail in the highest courts, whether state or national. Not-
withstanding volumes of overfine analysis and distinctions, the one
strictly vital question is whether an employer may free himself from
the obligation to pay compensation by proving his own freedom from
negligence or fault. And that he may not claim such a right, in the face
of a statutory declaration to the contrary, is determined sufficiently
in at least five decisions from the Supreme Court of the United States,''
to say nothing of a score or more of cases in state supreme courts.
It therefore may be taken for settled that henceforward the work-
men's compensation system is to be a part of our industrial order.
If there were less adequate sanction for it in definite principles of law,
strictly construed, there still would be abundant sanction in the great
principle- — legal, too, in a sense — which Justice Holmes invoked
in 191 1 in his epoch-making opinion *in the Noble bank case.^
It may be said in a general way that the police power extends to
all the great public needs. It may be put forth in aid of what is
sanctioned by usage, or held by the prevailing morality and strong
and preponderant opinion to be greatly and immediately necessary
to the public welfare.
In view of this principle, it well might be that a decisive con-
sideration in favor of the constitutionality of the compensation acts
should be found in that prompt and general legislative acceptance and
that present popular approval to which attention has been turned.
^The early favorable dedsion in Wisconsin, in the case of Borgnis et al.
V. Folk Co., 147 Wise. 327; 133 N. W. 209, has been cited as authority in
neariy all of the later decisions sustaining the optional statutes. But the Wis-
consin law does not abrogate the defense of assumed risks in so far as the risks
are "inherent" or "necessary." Accordingly, the Falk decision cannot properly
be cited as authority for sustaining laws which do abrogate the doctrine of
assumed risks completely.
^Northern Pacific Railway Co. v. Meese, 229 U.S. 614; N. Y. C. R. R. Co.
V. White, 243 U. S. 188 ; Hawkins v. Bleakley, 243 U. S. 210 ; Mountain Timber
Co. V. State of Washington, 243 U.S. 219; Middleton v. Texas Power and
Light Co., 249 U. S. 152.
^ Noble State Bank v. Haskell, 219 U.S. 104, in.
22 TRADE UNIONISM AND LABOR PROBLEMS
Mr. Frederick L. Hoffman's ^ estimates of the numbers of in-
dustrial injuries suffered in the United States are admittedly rough,
with no claim of close accuracy. Nevertheless they are much used
as being the best comprehensive estimates there are — one might
perhaps say the only ones. Such as they are, they may serve as
the basis for some suggestive rough computations. Mr. Hoffman
estimates that there are some 25,000 fatal industrial accidents a year
in the country and about 700,000 nonfatal injuries disabling for more
than four weeks. In Massachusetts, in the administrative year 1913
-1914, the industrial accident board had reports of 96,382 non-
fatal injuries. Of these, 55,113 disabled the sufferers for more than
one day ; and of these, in turn, 11,836, or 21.5 per cent, disabled for
more than four weeks. If the same relative durations of disabilities
as in Massachusetts hold for the country as a whole, then we have
each year some 3,255,800 nonfatal industrial accidents disabling for
more than one day and no less than 5,6^0,000 reportable accidents.
There have been no attempts to sum up the grand totals of com-
pensation awards for all of the states. Nor would it be worth the
necessary effort to do so. Evei! within a given state there sometimes
are such changes of method in the presentation of data that items are
of varied or uncertain significance. It must suffice now to submit
typical figures from several of the states, figures which, unfortunately,
are not generally or closely comparable. In Wisconsin the cash bene-
fits actually paid from the beginning, in 1911, until June 30, 1918,
had amounted to $5,144,000, in addition to some $1,773,000 for
medical care, making thus a total of $6,917,000. The losses reported
under the comprehensive insurance provided in West Virginia
amounted to $6,678,237 in the five years 1913-1918. In California
there had been awards of at least $13,370,000 from January i, 1914,
to December 31, 1917. In Ontario in the four years 1915-1918
there were cash awards to the amount of $9,332,524, aside from all
provision of medical care. In Massachusetts in the first six years
of compensation there were awards of $20,253,000 in cash and
medical care. In the first three and a half years of the New York
law benefits to workmen whose employers were not carrying their
own risks, about 85 per cent of all, amounted to $36,631,000.
1 Paragraph inserted from same author m U.S. Bureau of Labor Statistics,
Bulletin No. 212 (igi6), pp. 359-377.
WORKMEN'S COMPENSATION 23
Large as these figures are, they become more impressive when it
is noted that in each case the periods covered include the first years
of compensation experience, when a number of conditions combine
to keep payments, and even awards, far below the heights to which
they naturally soon must rise. After a few more years of experi-
ence the amounts of the benefits will be much greater than they are
now. So, of the total of $9,332,500 awarded in Ontario in four years
no less than $3,514,600 belongs to the one year 1918, when medical
care to the amount of $370,000 was also provided. In Pennsylvania
in 191 7, the second year of compensation, benefits paid and awarded
amounted to $7,161,000, while the figure for the next year was $ir,-
640,000. In Illinois, in the single year 191 7, cash benefits to the
amount of $4,906,000 were paid. And of the $20,250,000 awarded
in Massachusetts in six years $4,647,500 was for the latest year re-
ported upon, 19 18.
Yet even in Massachusetts the awards are still far short of their
normal maximum. Even if there should be no increase in the number
of injuries or in the scales of benefits, and if workers already have
learned fully about the law and never neglect to claim their rights
under it, the maximum cannot be reached until after 1924. For it
was in 1914 that the term for the payments of benefits for fatal in-
juries was extended to 500 weeks, approximately ten years. And so
it is in other states. Since there are many states which allow 500
weeks or ten years of payments for death and permanent disability,
as well as a number which continue payments on account of these
same injuries during the life of the beneficiary, it is clear that it must
be a great many years before the stoppage of payments which will
have run their full term will balance the payments which will be
starting anew. But all influences must be counted .,at their true
weight. So far as the sums paid on awards may be increased by the
growth of industry and its personnel or by a rise of wages pari passu
with general prices, there may be no change either in the real value
of the benefits for those who receive them or in the real burden which
the awards place upon industry. But so far as injuries may become
more frequent or more serious through the introduction of more
powerful or more rapid machinery or through the taking on of new
and untrained operatives, or so far as workers may seize more fully
the advantages which the laws offer them or even may lean more
24 TRADE UNIONISM AND LABOR PROBLEMS
heavily upon the law, as they appear to have done in certain Eu-
ropean lands/ there must be for an indeiinite time to come an increase
in the values, real as well as in mere money, of the benefits which
American employees will receive under the compensation laws. There
is every prospect, too, that the laws will be made more comprehensive
— not only will be extended to the few states which now do not have
them, but everywhere will come to cover workers more generally. But
even if the country as a whole, by one change and another, should
never come to make more liberal allowances than had been developed
in Massachusetts in 1918, the total for all of the states would be not
far from $125,000,000 or $150,000,000 a year. If the experience of
Pennsylvania and New York be taken as an indication of what is to
come, the figures must be placed higher, perhaps at $200,000,000.
Such sums for a probable future are truly enormous. But when
the amounts now paid out or likely soon to be paid out, a few or sev-
eral millions yearly in a single large state and a few hundreds of
thousands or even less in smaller states, are averaged over the total
numbers of beneficiaries they do not appear large. For it must not
be forgotten that a great many persons are the victims of industrial
accidents each year. Thus the total payments in Wisconsin during
practically the whole of her compensation experience, from Sep-
tember I, 191 1, to June 30, 1918, reduce to about an even $100 for
each compensated injury, cash benefits and medical care both included.
Other states show rather lower average figures. In California in 1916
the average payment in all compensated cases was $93.20. In Iowa
total benefits averaged $63.71 in 1917 and $90.46 in 1918. In Massa-
chusetts during the first five years of the law the average costs
per case for all payments, as actually made and estimated to be
outstanding, were : 1913, $40.53 ; 1914, $43:58 ; 1915, $43.38 ;
1916, $43.56 ; 1917, S38.98.
These figures and others of the same general character are not very
instructive. They are not fairly comparable one with another. They
run in terms of a vague general average of widely different par-
ticulars; and they are affected in many ways by the situations in the
several states. The more recent the institution of the compensation
system the wider the difference between awards and actual payments.
And the provisions of the statutes vary so widely, as to ratings of
iLudwig Bernhard, Unerwunschte Folgen der deutschen Sozialpolitik.
WORKMEN'S COMPENSATION 25
awards, extent of medical care, duration of payments, and so on, that
general averages yield no real information as to what compensations
are received for definite injuries under definite conditions.
It is somewhat more instructive to consider the awards made for
specific injuries, of which the practical consequences may be under-
stood readily. For fatal injuries the average award made in Connec-
ticut in 1915 was $2269. In Illinois in the same year awards for the
same injury averaged almost exactly the same — $2273. In Cah-
fornia the awards averaged $2445 in 1917 and $2625 in 1918. In
Pennsylvania for 1916, 1917, and 1918 the figures were $2383, $2272,
and $2659. In the first year of the New York law, awards for fatal
injuries averaged $3241. In Oregon, in the two-year period 1915-
1917, the awards, where there were dependents, averaged $5752. In
Massachusetts, for the first five years the figures were I1367, $1781,
$2970, $2603, and $2631. In Ohio in 19 15 the amount was $3098.
Perhaps it will be accurate enough to put the general average for all
of the states at about $3000, or something less.
The payment of from $2500 to $3000 is manifestly inadequate
compensation for the death of a breadwinner. None can deny that.
But it must be remembered that the purpose of the statutes never yet
has been to make full compensation for the pecuniary losses due to
Injuries. The pertinent question is whether such amounts, painfully
inadequate as they are, are not greater than the amounts paid and re-
ceived on account of the death of industrial workers before the com-
pensation system was introduced. And, in this connection, it will not
do to raise for comparison the sums awarded by way of damages in
suits at law. Probably such damages did amount to considerably
more than $3000, on an average. But they came only after pro-
tracted and expensive litigation, so that their net amounts for suc-
cessful litigants should be reduced much for purposes of comparison
with present compensation awards, which are made more promptly
and with only trifling cost to the beneficiary, or none at all. When
due allowances have been made for direct and indirect costs of liti-
gation, a $3000 verdict, or even $5000 or $10,000, becomes a much
smaller thing than at first it appears to be. But even more important
is the sad fact that, when employees were killed at their tasks, suits
at law were not always brought and pushed to a successful issue. In
a great majority of the cases no suit was brought. And such suits as
26 TRADE UNIONISM AND LABOR PROBLEMS
were brought were not always won by the plaintiffs. For much the
larger number of fatal injuries there was either no payment at all or
only such payment, large or small, as the employer might feel in-
clined to offer. And in all too many cases he felt inclined to offer
nothing, or only a piteously small sum.
For information upon this unpleasant subject there are now no
more valuable data than the figures presented by the state commis-
sions of inquiry which reported some ten years ago with reference to
the desirability of enacting compensation laws. These show that in
great numbers of cases employers, even some of the largest and most
prosperous of them, frequently neglected to make any payment what-
ever to the dependents of those who had been killed in their service.
In many cases money was paid, but in sums so petty as to be little
better than nothing — $50, $100, or perhaps a little more. Cases in
which the payments ran in thousands were extremely rare. It may be
a not unfair sweeping generalization to say that under the so-called
liability laws payments of any amount were not made in more than a
third of the cases of fatal injury to employees. And the average of
the sums actually paid would be in the small hundreds. A careful
study has shown that in Pennsylvania shortly before the passage of
the compensation act the average amount paid on account of fatal
injuries was $261,^ at a time when under the compensation laws of
Connecticut and Ohio the corresponding figures were $2269 and
$3098. The next year in Pennsylvania the average compensation
award on account of fatal injuries was $2383, while in 1918 it was
$2659, a little more than ten times as much as had been secured under
the liability laws.
There can be no reasonable doubt that the compensation awards
made for fatal injuries do mean a large increase from the petty and
uncertain sums which dependents received under the liability laws
The differences appear so great in the loose comparisons which it is
possible to make that, to a complete certainty, they could not dis-
appear after the fullest collation of data. Indeed, the differences now
apparent may quite as likely be below the reality as above it. And it
must not be forgotten that such sums as now are received come
promptly and without appreciable costs to the recipients. It is true
that much the greater number of compensation awards for fatal
HJ. S. Bureau of Labor Statistics, Bulletin No. 217 (1918), p. 107.
WORKMEN'S COMPENSATION 27
injuries, as for other injuries, are paid in a continued series of small
sums, not at once in a lump, and that in so far the awards must be
discounted for purposes of close comparison with the payments
made in full at one time under the old order. But again the differ-
ence in amounts is so much in favor of the compensation awards that
a full discounting of them could not bring them down to or near the
level of the liability payments. It might, indeed, not be unreasonable
to maintain that, on the whole, the series of continued small pay-
ments are the better arrangement for beneficiaries. That, at least, has
been the judgment of those who- made the compensation laws.
An examination of the compensation awards for nonfatal injuries
leads to similar conclusions. In Pennsylvania the awards for the
loss of an eye in the three years 1916-1918 were $959, $1065, and
$1198. In Wisconsin in the four years 1914-1918 the cash awards,
aside from medical care, for the loss of an eye were $990, $1033,
$1033, and $1078. In California in 1917, the first year with relevant
reports, the average award for the loss of an eye was $1137. These
figures too are pathetically small. But unquestionably they show
payments much greater than 'were made for the loss of an eye before
the days of workmen's compensation.
If it be true that the compensation system has meant the payment
of much larger sums to those who have suffered from industrial acci-
dents, it should be quite safe to infer at once that injured workers
and their dependents have been made much better off. There is, of
course, a possibility that in a given case the compensation award
may prove of little real advantage to the recipient, or of no advantage
at all. But such cases must be so very exceptional that they need not
be considered. It is, therefore, almost a work of supererogation to
show in definite detail that recipients actually have been benefited.
Yet this has been done. A painstaking study, carried out under the
United States Bureau of Labor Statistics, has traced the uses and
consequences of the compensation awards in a number of concrete
cases.^ And the results are exactly such as were to be anticipated.
It appears that in Connecticut and Ohio there was an unmistakable
effect in preserving family life for the dependents of those who had
1" Effect of Workmen's Compensation Laws in Diminishing the Necessity of
Industrial Employment of Women and Children," U. S. Bureau of Labor Statistics,
Bulletin No. 217 (1918).
28 TRADE UNIONISM AND LABOR PROBLEMS
been killed or permanently disabled. Children were enabled to con-
tinue at school. Mothers were enabled to remain in their normal re-
lations to their families. The Ohio Industrial Commission has issued
a bulletin devoted wholly to showing the uses made of lump-sum pay-
ments on account of death and permanent disabilities. The bulletin
is illustrated profusely. And the pictures of tidy little homes bought
and of modest business places established with the lump sums
bring one almost to the point of declaring it a happy fate for an Ohio
woman to lose her husband by an industrial accident. . . .
If the compensation system has increased severalfold the pittances
which formerly were paid to the victims of industrial accidents, that
in itself is enough to justify the system fully. But workmen's com-
pensation laws may have far more beneficent effects than can be seen
in the payment of any awards for injuries, however liberal these may
be. It is vastly better to prevent disablement, maiming, and death
than to provide even the most generous allowances to the injured
and to the dependents of the slain. And, while in the years of agita-
tion for workmen's compensation perhaps the greatest stress ordi-
narily was laid upon the assurance of pecuniary indemnifications for
injuries suffered, few American advocates of the compensation bills
failed to claim that the proposed measures might be expected to re-
duce the numbers of accidents. Indeed, it would be unfair not to
allow that the more earnest advocates were always fully aware of the
possibilities of accident prevention which lay in their proposals.
If they did emphasize the other consideration, probably it was be-
cause of a well-grounded conviction that there was more persuasive
argument in. it. To state results which must follow at once, directly
and in definitely measurable magnitudes, was likely to be more ef-
fective argument than to make claims which, in the nature of
the case, it would be impossible to prove, at least to the conviction of
an interested doubter.
And it is not seriously to be questioned that already the American
compensation laws have benefited workmen, and other classes
as well, much more by stimulating intelligent and successful cam-
paigns for industrial safety than by adding some millions to the
yearly payments on account of accidents which have happened.
Some of the largest of American employers and many of the
smaller ones had well-organized plans and agencies for the reduction
WORKMEN'S COMPENSATION 29
of accidents among their employees. And results were developing,
as appears from several reports of undeniable significance. Statis-
tics of the safety movement in the iron and steel industry and in
machine making, which have been published by* the United States
Bureau of Labor Statistics/ show reductions of accident frequency
and severity more rapid before there were any American compensa-
tion laws than later. Substantially similar is the lesson from the coal-
mining industry, as its figures have been prepared by the United
States Bureau of Mines. . . .
But more might be said. It would be ungracious now, when
American employers are so hearty in their support of compensation,
to attempt to say how many of them there are who were induced to
begin or to quicken their efforts for the safety of their workpeople
simply and solely by the fact that the new compensation laws made
accidents expensive for the business, or more expensive than before.
Moreover, such an attempt would fail of any definite success. And
so this unpleasant topic may be dismissed with the brief but confident
statement that there Were many such employers. Of this all are
convinced who have watched closely the bringing in of the com-
pensation statutes in one or more of the states. There was sinister
significance in the objections which employers raised against any
compensation enactments, in their strong efforts to weaken the pro-
visions of bills which promised to become laws or to prevent the
inclusion of themselves under them, and in their panic eagerness for
the adoption of safety measures and appliances as the laws went
into effect. There is, therefore, no doubt whatever that in the
directest possible way the compensation laws have conduced to the
promotion of safety policies, and thus to the saving of life and limb,
by exacting more money from employers in whose service injuries
are suffered.
It is not possible to reach any safe conclusion as to the actual
effects of the compensation movement, or the compensation statutes,
in the promotion of industrial safety by a superficial reading of the
general statistics of accidents during the few years since the Amer-
ican laws have been in force. Perhaps it will be imp'ossible to reach
any such conclusion of general validity by any use of the current
statistics. For the influences which the compensation laws must be
^As in its Bulletins Nos. 234 and 216.
30 TRADE UNIONISM AND LABOR PROBLEMS
presumed to have exercised have been blended with other influences.
As in Europe in earlier years, so now in the United States the com-
pensation laws, with their requirement of a return of industrial ac-
cidents and with their promise of money to the injured, must tend
for years to increase the returns of accidents, even while there may
be no increase of actual numbers. And nobody knows how important
this consideration is or how long it will continue to be important.
Again, there were, as has been seen above, unmistakable downward
trends in the American accident rates, at least in certain important
industries, before the era of compensation. And nobody can tell
how much of a later decline might be merely a continuance of this
early movement. Still further, large account must be taken of the
industria,! conditions brought in by the great war. An influence in
modern times always making for higher accident rates is in the
technical progress and the expansion of industries generally. The
appliances of modern industry are ever becoming vaster and more
powerful, and their speed is ever faster. The tension is ever higher.
The labor force is ever being augmented by the taking on of new and
untrained operatives. And all of these conditions and tendencies
have been found in abnormal degree in American industry during
these past four or five years, while the compensation laws have been
taking effect.
While, then, there has been of late years one large force (the gen-
eral safety movement developed under the compensation laws and
independently of them) making for greater safety in American in-
dustry or for an appearance of it, as reflected in the statistical returns
of accidents, there have been two making in the opposite direction
(the progress and expansion of industry and the fuller reports which
the compensation laws secure). Accordingly, there is nothing sur-
prising in the fact that nearly all state reports show larger and
larger numbers of accidents and probably would show also an increas-
ing rate of accident frequency if the figures were all presented in
such manner as to reveal the true situation. Nor is there anything
highly instructive in this same fact, at least there is not anything def-
initely instructive as to the effect of compensation laws upon accident
frequency or severity. It is, indeed, rather disconcerting, at first
glance, to read that the accidents reported to the Massachusetts
Industrial Accident Board rose from 90,631 in 1912-1913, the first
WORKMEN'S COMPENSATION 31
year, to 174,372 in 1916-1917, and that corresponding figures for
Maryland rose from 20,348 in 1915 to 42,570 in 1918, for West
Virginia from 11,418 in 1913 to 24,379 in 1918, for Washington
from 11,896 in 1913 to 27,306 in 1918, and in New York from
225,391 in 1915 to 286,871 in 1918. But these typical increases
are explained easily by a reference to the familiar forces mentioned
just above, and most largely by the industrial conditions of the war
period. So in Massachusetts the rise in the number of reported
accidents was surprisingly small until the war began to show its
influence. The increase was only from 90,631 to 95,769 between
1912-1913 and 1914-1915, or less than 6 per cent; whereas in the
next two years there was an increase of more than 80 per cent.
In Washington the increase from 1912 to 1915 was only from 11,896
to 13,162 ; whereas in the following three years the accidents more
than doubled.
Indeed, it is reasonably clear, where careful and comparable re-
turns of accident frequency are to be had for a term of years, that
the campaigns for safety have had their natural influence uninter-
ruptedly throughout these latest years of unprecedented industrial
activity. There are important branches of American industry, not un-
affected by war conditions, in which some influence — presumptively
the general movement for safety — ^has been operating continuously
against the unfavorable influences arising out of the war and finally
has overcome them. This pleasant truth may be read in the table on
page 32 showing total accident frequencies per 1000 three-hundred-day
workers in certain plants or industries.
That the tendency toward a .lower accident rate, where this is
to be observed, has been due mainly if not entirely to the efforts
of employers, the employed, the insurance companies, and the pub-
lic authorities to promote industrial safety is not difficult of proof.
But the proof is not to be found in general accident statistics,
which at their best can but show the joint effect of several com-
bined forces. It is to be seen rather in the a priori certainty that
to cover dangerous machinery and in a thousand other ways to
fence against the ascertained cause of accidents must make for
safety, and in the records of a great number of individual employers.
The records of certain few very large corporations, as the United
States Steel Corporation and the International Harvester Company
32
TRADE UNIONISM AND LABOR PROBLEMS
Year
1905
1906
1907
1908
1909
1910
1911
1912
1913
1914
1915
1916
1917
1918
300
214
189
150
174
134
112
"5
74
48
96
85
242
,174
192
156
"3
HI
lOI
81
17s
126
125
137
104
87
6.19
S4S
5-31
4-97
4.46
4.70
4.66
4-44
3-94
4.25
(if it be not invidious to cite employers who are conspicuous rather
for size than for any superiority of their plans or motives), have
become a part of the world's best-known economic data. But there
are many smaller employers who have records quite as creditable.
It is not profitable to elaborate the obvious. And if anyone doubts
the efficiency of well-organized and persistent efforts after industrial
safety, he may find most impressive evidence in the records of es-
tablishments with safety appliances and in organizations and estab-
lishments without them. In iron and steel mills of three groups
the total accident frequency, per 1000 three-hundred-day workers,
was found to be 167.1, 272.4, and 507.9, according as the plants
had safety systems fully developed, in course of development, or
not developed at all.^ In machine-building plants the accident
frequency was found to differ as follows in three groups of plants,
according as there was or was not a good safety organization:
1 Column I represents one large steel mill with from 4575 to 10,862 employees,
and column 2 represents a group of smaller steel mills with from 27,632 to
108,994 employees. Both of these sets of figures are from the U. S. Bureau of
Labor Statistics, Bulletin No. 234, pp. 15-16. Column 3 represents iron and
steel mills amounting to about half of the industry in the United States, and
the data are from the U. S. Bureau of Labor Statistics, Monthly Labor Review,
Vol. VIII, No. 6 (1919), p. 234- Column 4 shows fatal accidents only in coal
mining, as reported by the U. S. Bureau of Mines.
2 U.S. Bureau of Labor Statistics, Bulletin No. 234 (1918), p. 204.
WORKMEN'S COMPENSATION
33
electrical apparatus, 65.1 v. 185.6; locomotive engines and other
engines, 119. 5 v. 141. 7; machine tools, 42.1 v. 123.4.^ . . .
The compensation movement, if not in every state the very com-
pensation acts themselves, is providing a highly important form of
practical education. It is giving us our first real and exact knowledge
about industrial accidents in the United States. Before the era of
the compensation laws there was not a single state in the country
whose accident statistics were of any real value. It is, indeed, in-
teresting to observe that the broad, general estimates of the total
numbers of industrial injuries in this country which had been made in
recent years are being substantially confirmed by the increasingly
full and reliable returns which now are coming in. Mr. F. L. Hoff-
man's well-known estimate of some 25,000 killed each year and
about 700,000 disabled for at least four weeks ^ is finding substan-
tial verification in the reports which now are coming from the com-
pensation commissions. The latest available returns for several of
the states show total injuries and fatalities as follows :
State
California (1917) . . . .
Illinois (1918)
Maryland (1918) . . . .
Massachusetts (1917) . . .
New York (1918) . . . .
Pennsylvania (1918) . . .
Washington (1918) . . .
West Virginia (1918) . ' . .
Total'
Total
Fatalities
109,988
36,432
42.570
174-372
286,871
184,844
27,306
24,379
886,762
628
492
163
481
1504
3403
414
548
7633
When there was no better authority for such frightful figures than
estimates, it was possible to doubt their truth. Many would not
believe that American industry was killing three workers every hour
of the year, night and day, and was wounding some millions an-
nually ; but now it is becoming more and more difficult to deny the ■
facts. The reports of the compensation commissions are doing more
than to give a terrible confirmation of early estimates. They give
also much additional information as to the nature of the injuries,
lU. S. Bureau of Labor Statistics, Bulletin No. 216 (igi7), P- 43-
2 U.S. Bureau of Labor Statistics, Bulletin No. 155, p. 6.
34 TRADE UNIONISM AND LABOR PROBLEMS
their physical and social causes, and their consequences. Doubtless
the present returns of most states still leave much to be desired in
the way of regularity, fullness, clearness, and comparability. But
a well-thought-out plan for the standardizing of accident statistics
has been prepared by the International Association of Industrial
Accident Boards and Commissions. And as the standard forms are
more generally adopted for the return of accident reports there will
accumulate a mass of statistical data which will be of the highest
value in every way. These will give the country indubitable evidence
of the reality and magnitude of one of our greatest industrial evils.
Then we may trust that American public opinion will not tolerate
any neglect of remedies. But the mass of scientific data for which
we are coming into the debt of the compensation laws will do more
than arouse public opinion. It will provide the only basis for sound
and hopeful policies of prevention and palliation. It will do more
even than that: it will help — is already helping — to humanize in-
dustry and industrial relations by showing how practicable and
. expedient it is for twentieth-century business to adopt in its human
relations principles and methods as well considered and as highly
specialized as those which long have been taken as a matter of course
in other relations.
The effects of the compensation system in the promotion of safety
are none the less real because the appeal to selfish and heartless em-
ployers is not made directly in the commonest form of statute but
indirectly and through practices developed under the statutes. For,
while the most common form of statute does lay upon the employer
an obligation to make payments on account of accidental injuries
suffered in his service, it also directs him to insure his liabilities, and
thus limits his costs to the definite amount of his insurance premiums.
Accordingly, it has been said by some that the employer's direct
business inducements to make his work-places safe are diminished,
not increased. For the moment this may appear to be true. But
it is not true. For in connection with the state funds, which often
are established as agencies of insurance, either exclusive (as in
Washington, Ohio, and other states) or optional and competitive (as
in New York, Pennsylvania, California, and elsewhere), provision
always is made in the statutes for at least some partial adjustment of
premiums to the accident rates of the insured, either individually or
WORKMEN'S COMPENSATION 35
by groups. And it cannot be doubted that the statutes and their
provisions for insurance have been drafted in the reasonable expecta-
tion that private insurance carriers also would vary their premium
charges in accordance with the same general principle.
And in actual practice one of the most interesting and gratifying
developments under the compensation system in America is seen in
the careful and unremitting endeavors of all insurers — state funds,
insurance companies, and mutual associations alike — to work out
a sound rule for making premium rates depend in part upon the
employer's efforts or success in safeguarding his work-places. Both
the principles of discrimination adopted and the practical measures
for carrying them into effect vary. There are open questions as to
the relative weights to be assigned to the accident rates actually
developed in experience (experience rating) and to conformity to
prescribed standards of safety (schedule rating). There are also un-
answered questions as to the extent to which individual conditions
and experience may be considered without departure from the sound
essential principle of all insurance ; that is, the principle of pooling
the individual in the collective group of the insured. It is not neces-
sary here to outline the excellent work which has been done by
numbers of very capable insurance experts in their attempts to solve
such problems. But it must not be forgotten that much of the best
thought of the insurance companies and of the compensation com-
missions is devoted to the working out of plans which may combine
sound insurance procedure with the utmost practicable allowances and
penalties for observance and neglect of approved safety measures.
And there are still other ways, at least as important, in which
compensation insurance has conduced to the safety of industrial eni-
ployees. Once the insurer has contracted for his premiums, it is
clear that he stands to gain the more — to save the more of the
premiums for his own profit — the more he can reduce the accidents
of the insured below the numbers upon which the premiums were
computed. And, at the same time, he may encourage his insured
to hope that a reduced accident rate will mean a reduced premium
for the next policy period. Thus we find that, as a matter of the
most obvious business interest, all sellers of compensation insurance
seek constantly to improve their risks, by inspections, by counsels
of safety, and by the preparation and urging of all manner of safety
36 TRADE UNIONISM AND LABOR PROBLEMS
policies and appliances. Very fortunate, indeed, it is that corpo-
rations with resources as great as those of the large insurance compa-
nies find it unmistakably good business to work for the safeguarding
of industry. Nothing has done more to clear private sellers of com-
pensation insurance from the charge of heartlessly exploiting human
misfortune for their own profit than their intelligent and persistent
endeavors to make work-places ever safer. Nothing can be more
likely to preserve for them their present rights in a large and expand-
. ing field of enterprise. At first individually, company by company,
but more recently chiefly through their specially constituted asso-
ciations and bureaus, and sometimes in friendly conference with repre-
sentatives of the state compensation commissions, private insurance
carriers have done a most admirable work in devising and recom-
mending plans for the safe construction, equipment, and management
of factories, mines, and other work-places. Their provisions for the
human element, that is, against the so-called moral hazards, are
scarcely less elaborate.
Whenever, as often under the statutes, those who employ large
numbers are allowed to dispense with formal insurance and to
"carry their own risks," workmen's compensation tends in the
simplest and most direct way to promote safety. In all such cases
employers know that each injury means so much direct cost to
themselves and that, therefore, it is for their own immediate business
advantage to reduce accidents to the lowest possible figures. Essen-
tially so it is also with all genuinely mutual insurance associations.
The conclusion, therefore, is fully warranted that compensation
insurance, with its merit ratings, does contribute largely to the
contemporary movements for industrial safety. And both insurance
and the merit ratings were contemplated in the workmen's com-
pensation legislation generally, even in the states where they were not
expressly required by the statutes. Here, then, is the happiest con-
sequence of the compensation system. It certainly is well if many
millions of money have been added to the sums formerly received
as indemnity and solace for the losses and sufferings entailed
upon workmen's families by industrial accidents. But it is much
better in every way if, as is not unlikely, some few thousands of
lives are saved each year and some scores or hundreds of thousands
of injuries prevented.
WORKMEN'S COMPENSATION 37
It must be confessed that, except as they did bring in compensa-
tion insurance and its merit ratings, the compensation laws have
not done much for industrial safety. Not often have they prescribed
rules or standards of safety or even conferred powers of inspection.
This, however, has been because such matters have been left to dis-
tinct statutes and distinct offices. In California there was a tem-
porary change of policy. For the revised compensation act of 1913,
replacing substantially the act of 191 1, was made up in considerable
part of sections devoted specifically and exclusively to the direct
promotion of safety in industry ; and the act itself was legally
designated the "Workmen's Compensation and Safety Act." But
in 191 7 the safety sections were entirely removed to a separate
statute. Other states, as a rule, have followed the plan of separate
statutes from the first. At present there are only about a dozen
states which make any provision for accident prevention in their
compensation acts. Doubtless there are real advantages in some
measure of coordination or unification in the two lines of activity.
But the present degree of separation is not as great as might
appear. For in many of the states there are industrial commissions
with general authority over all administration of laws affecting labor,
workmen's compensation laws, factory-inspection laws, safety laws,
and the rest. And it can make but trifling difference whether pub-
lic regulations which a given office is to administer are found in
different parts of one statute or in different statutes.
In the critically important matter of fixing compensation-insurance
rates, whether for the state funds or for private insurers, the
framers of the statutes usually have thought it sufficient to take
account of the actually developed accident experience of industries or
groups of industries. Rarely have they thought it well to sanction
schedule ratiiigs ; that is, ratings based upon conformity to approved
standards of safety .^ The terms of typical statutes, as in Ohio, un-
mistakably contemplate no other principle of merit rating than such
as may be derived from the accident experience of the insured.
There are statutes, as in Kentucky and Virginia, which in general
terms authorize "merit rating," while others authorize or direct
"schedule rating," with or without a fair implication that the words
lAs a matter of fact, legislatures and their draftsmen knew very little
about the different principles and methods of merit rating.
38 TRADE UNIONISM AND LABOR PROBLEMS
are to be taken in their technical meaning. Only in a few of the
states, as in Colorado from the first, in Michigan, New Jersey, Penn-
sylvania, and now since 19 17 in Washington, is there express and
definite sanction for the adjustment of premium rates with reference
to physical and moral conditions in plants, as distinguished from
accident rates revealed in experience. Accordingly, the state com-
missions, practically limiting themselves to experience ratings in their
administration of the state funds, have been much less efficient than
private insurers in their use of a most powerful force for the promo-
tion of industrial safety. The provisions of the Pennsylvania statute
and of recent amendments in New Jersey and Washington may
indicate that this important fact is coming to be recognized in public
places. If so, a change for the better may be in prospect.
But, even without large use of this efficacious means, some of
the state commissions have produced gratifying results. They have
conducted extensive educational campaigns ; they have made in-
spections, examined and recommended safety devices, established
safety exhibitions and museums, and widely scattered helpful printed
materials. The California Industrial Accident Commission long
has issued a valuable illustrated California Safety News, which can-
not have failed to do much good. The same commission conducted
a special campaign for safety in mining industries, with the appar-
ent result that fatal accidents in California mining fell from 20 in
1916 to 10 in 1917. In 1914 the Massachusetts Industrial Acci-
dent Board carried on for three months a campaign for safety in
establishments with some 55,000 employees. And a comparison
of accident rates for half-year periods before and after the campaign
shows a reduction of 20.8 per cent in the total number of accidents.
It is by discriminating attention to experiments and reports like the
two just mentioned — not by observing the broad, general movements
of accident rates — that one may come to his best conclusions as to
the effects of the compensation laws in making industry safer. . . .
So far, then, it would appear that the compensation system has
had no appreciable direct effect upon business. Nor, in the nature
of the case, can there have been any large, direct effects. The
single new influence to work directly is the weight of the com-
pensation costs as an addition to the expenses of doing business.
And, on the average, these costs caimot have figured for much.
WORKMEN'S COMPENSATION 39
Clearly their magnitude is shown by the premiums for compensation
insurance. And these, varying from a minor fraction of i per cent
of the pay roll in most textile mills to several per cent in structural
iron work, mining, and other specially dangerous operations, may
perhaps be generalized at about i per cent, or a little more.^ And
such a cost, a cost of such amount and of such character, can) have
no great effect upon the total expenses of producing, upon necessary
prices of products, or upon demands for goods.
The addition of i per cent to labor costs becomes an addition of
about one fifth of i per cent to total costs when account is taken
of the fact that labor, as in manufacturing, figures at about one fifth
of all costs. In other industries, as in mining, labor counts for much
more. But the costs of compensation, of compensation insurance,
are not a net addition to the employers' business expenses. Some-
thing employers paid in former days on account of industrial acci-
dents. The largest item was the amount paid for employers' liability
insurance. But there were other items also- — the small sums given
occasionally in direct and gratuitous settlements of claims, the costs
of litigation, and the rest. So that the immediate net increase in
the costs of production or business must be much less than the present
costs of compensation insurance. In fact, there have been official
claims for several of the states that the new system costs employers
no more than the old.^ Something still further must be allowed in
reduction of the fair charge against compensation. Better medical
care for injured employees and larger cash benefits for them make
the interruptions of their work less prolonged and less disturbing to
the orderly course of the business.
When all due allowances have been made for these reactions of
the compensation system, as for others which might be added, '
^In Montana, where employments cannot be especially free from dangers,
I per cent is the official estimate of the costs for the two years 1917-1918. In
West Virginia, where also mining is an important industry, the general
average of premiums for 1916-1917 was 1.41 per cent. In Wisconsin during
1913-1916 it was 1.33 per cent. In the exclusive state funds the premiums or
assessments are lower. But the question of true costs is so much involved with
other subordinate questions that it cannot be answered in a convincing manner
without elaborate expositions and discussions. The variety of Wisconsin indus-
tries and the different agencies of insurance operating in that state perhaps
make Wisconsin figures as instructive as any.
2 Montana Industrial Accident Board, 1918-1919, pp. 28-29,
40 TRADE UNIONISM AND LABOR PROBLEMS
possibly there may still appear some trifling increase in the direct
costs of industry. But trifling, indeed, must the increase be. And,
such as it may be, It beairs upon producers in nearly all branches of
industry, taking the word in its narrower meaning, and in nearly all
parts of the civilized world. Its true and final effects, therefore,
can be ascertained only by elaborate and somewhat profound analyses
and by careful examinations of industrial conditions, such as would
in themselves constitute an important study in economic theory. Are
modern producers' profits so high that from them can be taken these
trifling net additions to costs ? If not, will the producers' necessary
increase of his selling prices appear in a corresponding increase in
consumers' costs? If so, will demand be turned from the products
of those who have to pay compensations to the products of those who
do not have to pay, as from manufactured goods to agricultural
products? Or will consumers find their purchasing power commen-
surate with the higher prices, because they receive compensation
benefits, or are enabled to work and earn better, or are relieved
somewhat from charges for the care of victims of industrial acci-
dents? These and still remoter questions need not be answered
now. We may rest content in a reasonable confidence that, as no
disturbances because of workmen's compensation have been observed
in the industry of the United States or of foreign lands, so none
which can possibly come can outweigh, or even approximately bal-
ance, the business and social advantages which already have been
derived from that same system.
There are other consequences of the compensation legislation al-
ready apparent. As it has been humanizing industry, so it has been
humanizing judicial opinion, which in America is so powerful for
social good or evil. One need not be an extremist in order to believe
that the great body of our judicial reasoning about social relations
has been a dry and lifeless formalism, showing little recognition of
what it meant for the life and welfare of human beings. An eminent
New England jurist, still living, once declared, in a decision from
the bench, that the atrocious fellow-servant doctrine rested upon
"considerations of right and justice."^ Now such a complete dis-
regard of the human significance of the law never is found in the
compensation decisions. Rather the judges in a score of courts vie
iffo«'e V. Neiu York, New Haven, and Hartford R. R. Co., 82 Conn. 352.
WORKMEN'S COMPENSATION 41
with one another in praising the humane wisdom of the compensation
acts and declaring their purpose of interpreting them in no narrow
and technical sense, but broadly and liberally and in such manner
as to get the fullest practical effect to their noble humanitarianism !
Let still other observed consequences of the compensation system
be passed over now. But mention must be made, if only the briefest,
of certain serious defects in the present statutes, which have devel-
oped in practical experience. It would not do to dwell only upon the
merits of the American compensation system, with never a word
about its defects.^
To leave the enforcement of the injured worker's rights to the law
courts has been proved, in New Jersey^ and elsewhere, practically
to nullify the provisions of the statutes in great numbers of cases.
"The administration of American justice is not impartial, the rich
and poor do not stand on an equality before the law, the traditional
method of providing justice has operated to close the doors of the
courts to the poor, and has caused a gross denial of justice in all
parts of the country to millions of persons.'" Yet there remain com-
pensation states, north, east, south, and west, which have constituted
no special administrative boards. The sums paid under the acts for
medical care have been proved generally to be most wisely and
helpfully expended, hastening cures and thus benefiting both the
injured and the employer. Yet there are but four or five states which
^For the most part the defects may be regarded as merely shortcomings, as
merely preventing a full realization of the advantages which might be derived
from a compensation system. But in some few respects workmen have been
made positively worse off by the compensation acts. As hien who have been
disabled or maimed are more than ordinarily hable to accident, such appear
to find their opportunities of employment diminished somewhat (U. S. Bureau
of Labor Statistics, Monthly Labor Review, Vol. IX, No. i (1919), PP- 206-
207). More important is the fact that the compensation laws, making recov-
eries under the employers' liability law practically impossible, shut off from
any relief the workers whose injuries are not provided for by way of com-
pensation awards; that is, broadly speaking, those whose disabilities do not
continue beyond the prescribed waiting period— a week or ten days, more or
less. But, since most of these many thousands would have been unable to
secure relief under the liability system, the evil is not enormous. But it is real.
2 "Three Years under the New Jersey Workmen's Compensation Law," report
by the American Association for Labor Legislation.
3 "Justice and the Poor," Carnegie Foundation for the Advancement of
Teaching, Bulletin 13, p. 8.
42 TRADE UNIONISM AND LABOR PROBLEMS
do not limit the extent of provision for curative treatments, by
fixing a maximum either of amount or of time. The waiting period,
during which no benefits accrue, still is two weeks in some states
and ten days in many. Yet experience shows that not far from three
fourths of all disabilities cease within two weeks. In Oregon in
1915-1917, when there was no waiting period, it was found that a
waiting period of one week would have cut off 35.38 per cent of the
injured from their awards, while two weeks would have cut off 62 per
cent. While to many prosperous persons it may appear a small mat-
ter to have income suspended for two weeks or less, it is by no
means a small matter to the hundreds of thousands who have the
experience each year in this country because they have been injured
while at work. Failure of the employer to insure his liabilities often
makes it impossible for the injured to secure their promised benefits.
Yet there still are several states which make no requirement of in-
surance. The limitation of awards to those whose injuries have been
of accidental origin has raised many perplexing questions as to what
is an accident and has cut off from compensation a great many vic-
tims of industrial diseases and of exposures of one sort and another.
A defect deserving of special attention is the inadequacy of the
schedules of awards. About these there is much misunderstanding.
The amounts of compensation, in nearly all cases, are stated as such
or such a percentage of current earnings, as less than 50 per cent
in several states and under certain conditions, 50 per cent in about
half of the states, 55 in two or three, 60 in some fifteen, 65 in two
or three, and 66 ^^ in the rest. But these figures exaggerate the
benefits actually paid, being maxima which cannot be reached under
many common conditions of earnings, dependence, and the like.
Moreover, they are qualified in most of the states by the provisions
that, no matter how high the actual earnings, the awards may not
be above some maximum, as $12 a week, more or less, and that, no
matter how long disability may continue, payments must cease after
a while. The Minnesota commissioner of labor estimates that in
his state, while the nominal rate was 60 per cent, the awards in
cases of temporary disability were but 38 per cent of the direct wage
loss in 1916-1917 and but 48 per cent in 1917-1918. It is a cruel
mockery to present as" half pay, or two thirds, a series of payments
which may cease while yet the injured person is to live through a
WORKMEN'S COMPENSATION 43
long period of disability. It is scarcely less cruel to modify a nomi-
nal half or two thirds of pay by a iixed maximum of $15, $12, $10,
or $8. The highly paid railway employees have understood this all
the time. And nowadays it is being realized by many others. To
what extent present schedules of awards might be raised need not
be asked here. Most of them were fixed before the war period and
its enhanced costs of living; and the present height of prices has
forced a number of increases in the schedules,^ but not enough. They
still are generally too low. It is the amount actually paid that counts.
Be it remembered that actual awards for fatal injuries average from
$2500 to $3000, while the terms of the statutes commonly put into
readers' minds thoughts of $5000 or more.
Much the greatest defect of the American compensation statutes
is their lack of comprehensiveness. In a recent issue of the Monthly
Labor Review, Mr. Carl Hookstadt estimated that in the so-called
compensation states there were not less than 7,400,000 employees
who were not covered at all by the statutes. Some of these, a mil-
lion and a quarter of them, are in interstate commerce, where there
are special but not insuperable difficulties in providing coverage.
But the greater number, more than six millions, have been deliber-
ately left out or excluded by state legislatures. The reasons are well
known. There are strange beliefs as to the Heedlessness of compensa-
tions in occupations which, with or without good reasons, are counted
as not hazardous. There are rather discreditable deferences to the
prejudices of such classes as the farmers. And there are other minor
reasons. But the fact remains that nearly a third of the employees
in the so-called compensation states are in no wise affected by the
statutes. An estimate of the United States Bureau of Labor Statistics
indicates that nine of the compensation states cover less than half of
their employees and that only eighteen cover as many as two thirds.
And these estimates assume that in the states with optional acts there
have been no rejections by employers.
The net result of all this is that the present American compen-
sation system is much narrower in its application than we in our
optimism might suppose. In Kansas, with her population of more
than a million and a half, there were in 19 14 only 806 compensation
^U. S. Bureau of Labor Statistics, Monthly Labor Review, Vol. IX, No. 4
(1919)1 P- 245-
, 44 TRADE UNIONISM AND LABOR PROBLEMS
awards of all sorts; while in 191 7-19 1 8, after the waiting period,
had been reduced from two weeks to one, cash awards were made
only at the rate of 1916 a year. In New Hampshire, with a popula-
tion of some 450,000, there were in 1914 but 404 awards; and the
latest report of the Bureau of Labor makes no mention of compen-
sation awards. In Nebraska, with nearly a million and a half of
people, there were in 1915 but 605 awards. In the same state, in
the calendar year 1917, but $67,028.73 was paid for all cash benefits,
and in the first ten months of 1918 but $65,362.74. Can such states
fairly be counted as having compensation laws? But even in the
states which make the best showings only a small minority of the
injuries suffered are followed by compensation awards. There are
few states in which the figure is as high as 20 per cent. In California,
where the compensation law had been in operation five or six years
and had been administered by a capable and alert commission, there
were in 191 7 only 14,313 awards for temporary disability, although
there were 107,420 temporary disabilities reported.
The sum of it all is that the American compensation laws have
proved fairly their beneficence but cannot be supposed to have
attained their final forms. Either a superficial observation of the
contemporary course of legislation or a closer examination of the
underlying conditions which appear to direct it will yield reasons for
believing that the compensation system will be extended and that
its provisions will be made more liberal than they are at present.
WiLLARD C. Fisher
New York University
Ill
COMPULSORY HEALTH INSURANCE IN
GREAT BRITAIN^
THE right of a government to coerce its citizens into insuring for
those contingencies against which experience has proved that
they are unable to protect themselves has been asserted not alone by
Great Britain's Prussian enemy and eight other European nations but
by democratic and individualistic England herself. The presentation
of a bill for compulsory health insurance to the British Parliament
in igii was the more remarkable since 5,500,000 of the more thrifty
British workmen were then voluntarily insured against sickness
through friendly societies and trade-unions. This voluntary insur-
ance, however, did not provide for those who most needed it^ — the
less thrifty, the more poorly paid, those to whom sickness was a
greater disaster — who are now included within the compulsory
system. To these 8,000,000 workers the only assured protection was
that offered by the charitable societies and the poor law, with its
hated stigma of "pauper." To the British this provision seemed
wholly insufficient, and under the commanding leadership of Lloyd
George a bill for compulsory health insurance embracing all workers
was introduced into Parliament in May of 191 1. It was passed the
following December, came into operation in July of 1912, and six
months later benefits became payable.
Included within this "national health insurance," as it is termed
in Great Britain, are all persons between sixteen and seventy em-
ployed for remuneration under any form of contract, if engaged in
manual labor or if the rate of their annual earnings is less than $800.^
Within this classification numerically unimportant exemptions of
individuals or the exclusion of occupations may be granted by the
commissioners for reasons established by the act. Untouched by its
compulsory provisions are all those working independently— the
iFrom American Labor Legislation Review, Vol. VI (1916), pp. 127-137.
2The income Hmit has been raised to $1250 by the amending act of 1919.
45
46 TRADE UNIONISM AND LABOR PROBLEMS
small shopkeeper, the village carpenter or the cobbler, all of whom
have no employer and whose insurance would be difficult to enforce.
Those employed within the meaning of the act and insured during the
first year, 1912, numbered 13,472,000, or nearly 30 per cent of the
total population.
The benefits to which these 13,472,000 workers are entitled in-
clude medical care, sanatorium treatment if attacked by tuberculosis,
a cash benefit at the time of childbirth, a weekly payment during
twenty-six weeks of illness in a year, and a smaller weekly sum dur-
ing prolonged disability.
The medical benefit guaranteed to each person insured for half a
year consists of medical treatment, medicines, and specified appli-
ances. This benefit is administered by insurance committees, which
are appointed for definite areas to represent insured persons, doctors,
and the local government of the administrative district. These com-
mittees arrange for the medical care of the insured workmen in
accordance with regulations of the central administrative body, the
insurance commission, and then draw up a list or "panel" of physi-
cians who have agreed to the terms. These arrangements must ob-
serve two fundamental conditions : first, the right of every duly
qualified physician who wishes to serve upon the panel to be placed
upon it, provided he is not proved injurious to the service ; and,
second, the right of each insured person to select his physician
from among those on the panel. For the remuneration of physicians
a minimum of $1.68 and a maximum of $1.80 is annually set aside
for the medical care of each insured person, regardless of the amount
of medical attention he may require. This sum, exclusive of the
cost of drugs and appliances, is nearly twice the average physician's
income before the insurance act, estimated upon the basis of per
capita of the population. Under these conditions about 20,000
doctors in England, Scotland, and Wales have undertaken insurance
practice. This in various districts represents from 70 to 100 per cent
of the medical profession practicing among the industrial population.
Sanatorium benefit for the tuberculous insured is provided through
the insurance committees, which make arrangements for sanatorium
treatment with the local authorities.
A weekly sick benefit for a maximum of twenty-six weeks in a
year is granted to each insured person not over seventy years of age
HEALTH INSURANCE IN GREAT BRITAIN 47
who has paid twenty-six contributions, and who produces a certificate
from his panel doctor that he is incapable of work. Ten shillings
($2.40) a week for men and seven shillings sixpence (I1.80) a
week for women is the legally established benefit paid by each
society approved under the act.
A disablement benefit of five shillings ($1.20) a week is paid to
both men and women, insured for two years, when the illness extends
beyond the twenty-six weeks covered by sickness benefit. This
payment continues for the entire duration of the incapacity and
ceases only when the insured reaches seventy, when an old-age pen-
sion of equal amount is due him under the old-age pensions act.
The maternity benefit of $7.20 (exclusive of medical attendance)
provided for the wife of each insured man as well as for each in-
sured woman is one of the most popular and the most easily admin-
istered features. This payment, made solely to help defray the
expenses of confinement without regard to incapacity either before
or after, is to be distinguished from sickness benefit. Indeed, the
receipt of a maternity benefit debars the insured mother from the
right to receive sickness benefit for the four weeks immediately
following confinement.
The cost of these five benefits involving a large total annual ex-
penditure is divided among the worker, the employer, and the state.
Each insured man pays 8 cents weekly, an insured woman 6 cents,
the employer 6 cents weekly for each employee, man or woman,
while the state contributes an additional 4 cents. With the exception
of the low-paid worker earning less than at the rate of 60 cents a
day, for whom the employer and the state pay a larger proportion of
the contribution, this rate is uniform for all age or wage groups and
for all occupations, regardless of the sickness hazard of the industry.
This flat-rate contribution, a distinguishing feature of the British
system, is based upon the cost of providing a person of sixteen with
all the benefits until seventy, and with medical and sanatorium bene-
fits throughout life. It allows for the heavier claims of later life by
charging the person of sixteen more than his benefits at that age ac-
tually cost. By this method a reserve is accumulated from which the
claims of middle life may be met. To estimate this cost the sick-
ness tables of the Manchester Unity — one of the old and well-
managed friendly societies — were used after they had been adjusted
48 TRADE UNIONISM AND LABOR PROBLEMS
to allow for a different distribution of age, occupation, and civil
status among the compulsorily insured population. In this calculation
it was assumed that each of the approved societies carrying insurance
would have its fair proportion of the average distribution of risks,
and that no one society would depart radically from the average in
age distribution, in occupational hazards represented, or in propor-
tion of married and unmarried members. The actuaries, however,
were unable to find any suitable table for women, and according to
their own admission they used the adjusted Manchester Unity table
"without modification" to measure the probable rates of sickness
among women. Upon these assumptions the attempt was made to
determine once for all the liabilities of this gigantic new system of
national insurance and to fix a uniform contribution which would
be sufficient for future expenses among all societies.
A uniform contribution for the various ages entering insurance at
the inauguration of the system was possible only by crediting to
those over sixteen the amount which, had they been insured from
the age of sixteen, would have accumulated to their credit to pay for
the heavier claims of old age. Accordingly a "reserve value" was
credited to each person over sixteen included within the act, making
an aggregate total of $432,000,000. This huge sum at first appeared
only as a book credit. To convert this into cash, and at the same
time to provide interest on the capital sum, nearly one fifth ^ of each
week's contribution is diverted to writing down the reserves, a
process which it was originally estimated would require eighteen to
twenty years. When the reserves have been converted into cash,
the released one fifth may be used for increasing the benefits estab-
lished in the present act.
The financial side of the act centers around the approved societies
which are the real carriers of insurance, paying cash benefits to their
members and reimbursing the insurance committees for expenditures
connected with medical and sanatorium benefits.
The approved societies, of which there are 23,500 independent
societies, lodges, and courts, are in some cases the old friendly
iThe amount set aside from each weekly contribution has been reduced by
the amending act of 1918. The sums thus released have been used to increase
the money available for the payment of cash sickness benefit for women and
to create various special funds established by the amending act. See footnotes
I and 2, p. so.
HEALTH INSURANCE IN GREAT BRITAIN 49
societies approved for the purposes of the act, some have been or-
ganized by trade-unions, and still others are special societies modeled
after the friendly societies and organized to administer national
health insurance. Following the prerogative of the friendly society,
each insured person is given an unrestricted right to select his society,
and each society may reject an applicant on any ground save that
of age. Thus it may limit its membership to those who are members
of a trade-union, to those who are engaged in a particular occupation,
or to total abstainers, etc. The great discretionary power given to
the societies to administer their own affairs is a keynote of the
British system. In theory each society of over 5000 members is
financially independent, its solvency depending upon its own suc-
cessful administration. If the expenditure is in excess of the actuarial
expectancy, a deficiency will result which the society must make
good, either through a levy upon its members or by a reduction in
its benefits. Temporary provisions for persons who might be refused
and for those not desiring to join a society were supplied by the
"deposit contributors' ftmd," under the control of the insurance
commissioners.
A segregation of the insured persons by trade has in some cases
resulted from the freedom of the insured to choose his society and
from restrictions placed upon membership by the societies them-
selves. In the words of the interim report of the departmental com-
mittee on approved society finance and administration, "Insured
persons were allowed, were, indeed, urged, to segregate themselves
into societies that seemed to promise satisfactory results, and the
prospect was held out to them that they would derive a direct benefit
from the wisdom of the choice of a society. In other words. Parlia-
ment contemplated in one fundamental aspect a departure from the
fundamental working of a fiat-rate system." This trade segrega-
tion, whether a favorable one, as in the case of bank clerks and
domestic servants, or an unfavorable one, as in the case of cotton-
mill operatives, miners, and boot and shoe workers, carried with it
the isolation of trade risk far below or far above the average occu-
pational hazard for the entire insured population for which the
fiat-rate contribution was calculated. The uniform contribution cal-
culated for the average is frequently insufficient for the worse risks,
and a society may therefore be threatened with a deficiency, since
so TRADE UNIONISM AND LABOR PROBLEMS
each is financially independent and is unable to benefit from the
surplus of another having a more favorable selection of members.
The deficiency from this cause actually threatening some societies
has proved a serious matter to two departmental committees. The
recommendations of both were the same ; namely, that a portion of
the reserve fund be set aside to form a "special-risks fund" from
which societies having an unfavorable selection of lives might recoup
themselves. This assistance to individual societies is necessary even
though the sickness benefits for men, taken as a whole, are within
the actuarial expectation.^
Moreover, a variation from the normal distribution of women
has presented grave financial questions to other societies. The sick-
ness rates for women, it has been pointed out, were assumed, in the
absence of other evidence, to be the same as those for men. Ex-
perience has shown that sickness among single women is in excess
of the expected rate, while that of married women is even more ex-
cessive. This means that the women are now receiving more than
their contributions entitle them to. To remedy the situation con-
tributions should be increased or the benefits reduced. This funda-
mental remedy has been shunned by two departmental committees
in succession, and the same solution has been proposed by both, —
that of diverting part of the reserve funds to supply the immediate
needs. To meet the more numerous claims of married women, due
in part to the demands for sickness benefit during preg-nancy, un-
foreseen by the actuaries, still a third invasion upon the reserve
funds, coupled with a parliamentary grant, is contemplated by both
committees.^
iThe amending act of 1918 has met the problem of unequal-sickness ex-
perience due to unfavorable selection by creating a contingencies fund for each
society and a central fund. The contingencies fund, wholly derived from sums
diverted from the sums originally set aside for the reserves, is to be used by
individual societies in meeting deficiencies which may be disclosed upon actuarial
examination. The central fund, derived in part from sums originally set aside
for creating reserves and in part from parliamentary grants, is to be used
to meet deficiencies in societies — deficiencies which are caused by sickness aris-
ing from occupational hazard or by other causes over which the society has
no control.
2 The amending act of 1918 has provided for the excess sickness among
women by increasing by lid. the weekly amount available for paying benefits
to women. This sum is obtained by subtracting this ^d. from the amounts
originally set aside for writing down the reserves. The amending act also
HEALTH INSURANCE IN GREAT BRITAIN 51
In contrast to this segregation, a widely scattered membership
without geographical or trade grouping may result from the same
freedom in selecting a society. This situation, though unaccompanied
by the same financial dangers, has its grave disadvantages. For
example, because the members of a community or industry are in-
sured in hundreds or even thousands of societies with other persons,
it is difficult to discover an excessive amount of sickness for that
group. Without this knowledge it is of course more difficult to take
preventive steps. Moreover, a membership distributed throughout
the entire kingdom has materially hindered the development of any-
thing like an effective system of sick visiting ; it is even a question
with one society actually insuring millions of workers whether a
complete system, reaching out to the tiny isolated villages, will pay
for itself. Without such a system the ratio of unnecessary claims
will be somewhat higher than when they are closely watched, as they
can be with a concentrated membership.
The conclusion to be drawn from this British experience with a
flat-rate contribution and with free choice of carriers is twofold. First,
the two when dependent on each other are undesirable. A flat-rate
contribution is clearly impossible when there is unrestricted freedom
in the selection of the society, because of the segregation of special
risks which may and does result. Secondly, even if the flat rate is not
combined with choice of approved society and if all possibility of
segregation of risks is eliminated by prescribing the carrier, a flat
rate is still undesirable. First, it is impossible to foretell accurately
the liabilities even upon the most accurately prepared sickness data.
The error in the sickness rates of women made by the British ac-
tuaries is an example. Secondly, the contribution is regarded as
permanent by the contributors, and any attempt to change it is
resisted. Hence, as in Great Britain, initial mistakes in the financial
estimates must be rectified from some other source. The same op-
position to any increase in the contributions has been manifested
when the purpose has been to increase the facilities of the insurance
system. As a result, such additional expenditures have been met
provides for the higher sickness rate among married women by establishing the
women's equalization fund derived from parliamentary grants. This fund
is to be apportioned among the approved sodeties with reference to the number
of married women members.
52 TRADE UNIONISM AND LABOR PROBLEMS
by parliamentary grants when as a matter of justice the increased
income should have been derived from the insurance payments. The
system of free choice of carrier, even if unaccompanied by a flat-rate
contribution, is in itself undesirable. The same segregation of mem-
bership might well result, involving a higher contribution to cover
the experience of individual funds. Where many employees in a
plant were insured in as many societies there would be dismay upon
the part of the wage clerk in setting aside the correct contribution for
each man. This mechanical difficulty might well be an incentive for
the employer to maintain his own establishment fund. Moreover,
the difference in the weekly contribution, assuming it made a dif-
ference to the employer as well, might well lead him to discriminate
in favor of the most economical fund. Such a development would
render freedom of choice chimerical. Furthermore, the system as a
whole would be crippled if it were unable to ascertain in which trades
and localities the sickness rates were highest and if, for lack of this
knowledge, it were unable to call attention to the excessive sickness
and to take active steps for its prevention.
The financial difficulties facing the British system, it is important
to bear in mind, are due to the attempt to forecast once for all time
the cost of the insurance, in which the government actuaries failed,
and, secondly, to the ironclad nature of the contributions and bene-
fits which precludes every effort to obtain additional income from
this source. These are defects which the flexible average premium^
system adopted by the German act and in successful operation now
for more than a quarter of a century has been able to avoid.
' The administration, aside from that of the approved societies which
has just been considered, rests with the insurance committees and the
central insurance commissioners. The administration of medical and
sanatorium benefits, although duties naturally falling upon the ap-
proved societies, have been farmed out to the insurance committees
because of the greater ease in administration when the membership
is localized. The insurance committees — which require duplicate
records, increase the staff of workers, and thus add to the cost of
administration — are a cumbersome effort to provide for local ad-
ministration, the principle of which has been violated by the present
organization of the approved societies.
The central administration is intrusted to four commissions, one
HEALTH INSURANCE IN GREAT BRITAIN 5^
for each of the four countries England, Ireland, Scotland, and Wales,
and a joint committee which coordinates their activities.^ It is these
five bodies, jointly referred to as the commission, which make the
extensive regulations for the administration of the act, and which
supervise the approved societies and insurance committees, endeavor-
ing as far as possible to make the practices uniform throughout the
kingdom. Here too there is unnecessary duplication in administra-
tive force, necessitated by the strong feeling for " home rule," which
is not confined to Ireland alone.
Notwithstanding, however, the unfortunate systems of finance and
of administration which have been adopted, the beneficial effects of
the act are quite evident. During the first year of benefits (January,
i9i3~J^iiu^ry, 1914) 3,600,000 persons are calculated to have had
sick benefit, or about 25 per cent of those insured, an experience
which roughly corresponds with the financial estimates. This has
involved an expenditure of $30,000,000 for the entire kingdom. The
disablement benefit, which really covers permanent invalidity, was
expected to involve an expenditure of $9,700,000 in 1915, thus in-
creasing by one third the amount spent in sickness benefit. Its fi-
nancial success, for which there were many fears before it came into
operation in July of 19 14, is revealed in the recent interim report
of the departmental committee on approved society finance and
administration. The committee states that during the first eighteen
months the expenditure was within the actuarial expectation for that
period, byt that in the future it is possible that the disablement
benefit for women, and especially for married women, may involve a
heavier charge than originally anticipated. The combined effect
of the medical care and the provision of cash benefit is that many
who previously had dragged along without medical advice, forcing
themselves day by day to work in spite of illness, have now for the
first time had proper attention. Physicians have said, "I thought
I knew how much illness there was in my neighborhood, but
I had no conception of the amount that existed until I was brought
in contact with it through the act. ... I had no idea that it existed
iThe Ministry of Health Bill provides that the work conducted by the
insurance commissions shall be under this new department, which will also
direct the health activities previously conducted by other government bodies,
such as the local government board.
54 TRADE UNIONISM AND LABOR PROBLEMS
and was going unrelieved, and that people were dragging along
with such illness." An official investigating commission states that
"already there are indications that as a result of the rest obtained
under the act a better condition of health has in certain cases been
attained than has been experienced for many years."
The maternity benefit, it is calculated, went each week of the first
year to 17,000 mothers, and throughout that year 887,000 received
maternity benefit, involving a total expenditure of $7,000,000. The
results of the cash maternity benefit were soon discernible in. the
rapid decrease in the mothers' seeking assistance from the out-patient
departments of hospitals and from other maternity charities, and in
their willingness to pay for what previously had been given to them,
sometimes engaging a member of the hospital staff, but more fre-
quently resorting to the midwife, who often could be prevailed upon
to give needed help with household duties. This increased use of
the midwife, trained and supervised though she be as in England,
creates a new problem, which can be solved only by providing the
maternity benefit in much the same way as medical assistance is
now provided for insured persons.
The effect has also been felt by poor-law officials and charity
workers. The poor law has been relieved of a large number of calls
for medical care from the parish doctor, for midwifery assistance,
and for outdoor relief in time of sickness. In the towns of Bristol
and Manchester the diminution in pauperism in 19 13 as compared
with 19 12 is attributed to the insurance act ; in the latter city the
number of payments of outdoor relief decreased by 30 per cent,
while the actual amount diminished 25 per cent. Among the Liver-
pool dock laborers it is estimated that in half the cases which re-
ceived sick benefit the home would have been broken up and relief
sought in the workhouse had it not been for the benefits of the in-
surance act. Charity workers too have found that the calls for
financial relief have diminished both in number and in the amount
of assistance required. On the other hand, some of the local poor-
law officials fear that the enlarged use of doctors brought about by
the insurance act, which is revealing a larger number needing hospital
care, may increase the inmates of the poor-law infirmaries. This
of course, is significant of the higher standard of medical care for
the workingman resulting from the insurance provisions. Sanatorium
HEALTH INSURANCE IN GREAT BRITAIN SS
benefit, notwithstanding petty jealousies between rival local boards,
fostered by the administrative system and the inadequate funds at the
disposal of the insurance committees for their share of the work,
was received by no fewer than 44,000 insured workers in the first
eighteen months' operation of the act. Of this number more than
half were placed in sanatoria, others were treated in dispensaries, and
still others were cared for in their homes by the panel doctor, under
the guidance of the tuberculosis officer. To assist in home treatment
1200 shelters for out-of-door sleeping were available, and in other
cases milk and eggs were supplied to patients in their homes.
Moreover, the whole antituberculosis movement has been strength-
ened. To provide the additional sanatoria necessary for the treat-
ment of the insured and their dependents provided for in the act,
Parliament in 191 1 made a grant of $7,200,000 to defray part of the
expense of sanatoria, whether erected for insured or noninsured.
Under this generous provision plans for 3000 new beds had been
made within the first twenty months and grants to the extent of
$1,287,000 had been either made or promised. Following the rec-
ommendations of the famous Waldorf Astor committee, that sana-
torium benefit should be available not only to dependents of the
insured but to the whole population, the government announced in
July of 19 1 2 that it was willing to bear one half of the expense
incurred by the local authorities in treating noninsured persons' as
well as the dependents of insured workers. For this purpose Parlia-
ment granted $1,464,000 and $2,300,000 for the budget years of
1914 and 1915 respectively. The provisions which have thus far
been made are but the beginning of an effective crusade against tuber-
culosis, instigated by the insurance act and originally restricted to
the insured and their families but later extended to the entire popula-
tion.
If even a cumbersomely conceived plan of health insurance can
improve health, decrease pauperism, and forge an effective weapon
against tuberculosis, are not we Americans challenged to devise a
system which will function more perfectly in our war against poverty
and disease ?
Olga S. Halsey
American Association for Labor Legislation
IV
THE BRITISH NATIONAL SYSTEM OF UNEM-
PLOYMENT INSURANCE— ITS OPERATION AND
EFFECTS'
COMPULSORY national unemployment insurance, the second
great effort of Great Britain to treat unemployment as an indus-
trial problem, followed closely upon the inauguration of the labor ex-
changes. Although this provision was planned to accompany the
measure for labor exchanges, the project was withheld until the plan
might be perfected and until the exchanges might become an efficient
adjunct. When a bill was finally introduced into Parliament it ap-
peared as Part II of the National Insurance Act of 191 1. This came
into operation in July, 191 2, as far as contributions were concerned,
but it was not until six months later, in January, 19 13, that benefits
were payable. Amendments affecting details, traceable in part to the
war, were passed in 1914, 1915, and 1916.
The act aims to cover involuntary unemployment in a limited num-
ber of occupations through compulsory insurance, to which employ-
ers, the workers, and the state contribute. The compulsory basis was
adopted as an essential condition for the elimination of unfavorable
selection of risks against the fund and to secure the insurance of those
who could not be reached through voluntary provision. The com-
pulsory feature embraces workmen of sixteen and over, employed at
manual labor under a contract of service in the following trades:
building, construction work (such as railroads, docks, harbors, em-
bankments, etc.), shipbuilding, mechanical engineering (including
the manufacture of ordnance and firearms), iron founding, construc-
tion of vehicles, and sawmilling when carried on in connection with
an insured trade or of a kind usually carried on in connection with
an insured trade.
iFrom Proceedings of the Conference on Social Insurance, 1916. U.S.
Bureau of Labor Statistics, Bulletin No. 212, pp. 874-886.
56
BRITISH UNEMPLOYMENT INSURANCE 57
The workmen thus insured numbered 2,282,324 in January, 1914,
when the act had been in operation one and a half years. The distri-
bution of these workmen among the various trades is shown in the
accompanying table.
Distribution of Workmen among the Insured Trades, as shown by
THE Number of Unemployment Books issued to Workers, July,
1912, to July, 1914
Insured Trade
Number of
Unemployment
Books issued
TO Workers,
July, rgi2, to
January, 1914
Per Cent
OF Total
Insured
Building
Construction of docks, railroads, canals, etc. . ...
Shipbuilding
Mechanical engineering
Construction of vehicles
Sawmilling (of a kind commonly carried on in an in-
sured trade)
Other industries (insured trades which occur in con-
nection with other industries, and where the non-
insured industry is main business of the employer)
Total
775.755
161,168
260,820
804,527
204,672
11,819
63.563
34-0
7.0
11.4
35-3
9.0
2.8
2,282,324
An analysis of the insured workers indicates that 64 per cent were
skilled, 36 per cent unskilled, and approximately 25 per cent union
men. The insured include about 10,000 women and 110,000 minors
between sixteen and eighteen years of age.
Exemptions within this group may be made by the Board of Trade
on the ground that the occupations usually are carried on inde-
pendently of an insured trade or that they are common to both in-
sured and uninsured trades. During the first year three such orders
were issued. Those in the permanent service of the Crown are also
excluded.
Determinations as to whether men are engaged in an insured trade
are made by the umpire appointed by the Crown. All decisions rest
upon the provision of the act that the determining factor shall be
the nature of the work and not the business of the employer. On
S8 TRADE UNIONISM AND LABOR PROBLEMS
this basis flagmen and lookout men employed by a railway in con-
nection with construction are not considered as engaged in an insured
occupation. The demarcation of insured trades on this principle has
proved a technical problem requiring during the first year 1268 pub-
lished decisions and 10,000 others given in correspondence. Not-
withstanding, the Board of Trade considers demarcation practicable.
The application of insurance to specified occupations only was due
to the dictates of prudence that the new experiment be confined to
those trades for which there was the greatest amount of data re-
garding unemployment. By a happy coincidence these trades are
those in which the fliactuations of unemployment are most severe and
where, therefore, there is the greatest need of protection.
From the outset it was realized that it might prove desirable to
extend the provisions to other trades, and accordingly power was
given the Board of Trade to include other occupations, provided
that it would not increase the parliamentary contribution by more
than ii,ooo,ooo ($4,866,500) annually during each of the three
years following. Resolutions in favor of the universal application
of the act were passed by the Labor Party at its conference in Feb-
ruary, 19 14, while the pressure of the demand from all sides, during
the spring of 19 14, was felt by the president of the Board of Trade.
Preparation for extension by a special order was made in regulations
issued in May, 1914. Further progress, however, was prevented by
the war, until the exceptional development of war industries forcibly
called attention to the necessity of provision for those whom peace
and the attending dislocation of trade would throw out of work.
The cost of insurance is divided equally between the employer and
the worker, each contributing at the uniform weekly rate of 2^ (f.
(5.08 cents), while the state contributes one third of this total, or
i/^«^- (3-38 cents) per week. In the case of boys under eighteen
the combined contribution of employer and worker is but zd. (4.06
cents) weekly. Men employed for less than one week pay a reduced
contribution of i d. (2.03 cents) for employment of one day, 2 d.
(4.06 cents) for two days, and the usual 2>^ d. (5.08 cents) for more
than two days' engagement. On this basis contributions for six days of
casual employment cost employer and workman bd. (12.17 cents)
each, as against the normal weekly rate of zY^d. (5.08 cents). The
greater expenses for casual labor may be avoided by engaging
BRITISH UNEMPLOYMENT INSURANCE 59
laborers through the exchange and by making arrangements whereby
the exchange pays the contribution. Under these conditions six days'
work of six different men are reckoned as one week's job for one
man, and the six-penny contribution is reduced to 2j^ rf. (5.08 cents) .
Advantage of this section was taken by the employers of 95,000
casual laborers during the first year of operation. The combined
contributions of workers and employers accumulated a fund of
£1,622,000 ($7,893,463) during the first year, which was increased
by the parliamentary contribution of £378,000 (81,839,537). The
income of the. second year was t£ 1,802, 000 ($8,769,433) from em-
ployers and workers and £602,000 ($2,929,633) from Pariiament.
From this fund, controlled by the Board of Trade, the benefits are
paid and sums laid away for reserve with which to meet the demands
of years of exceptional unemployment.
The contributory basis was considered essential in order to secure
the interest of employers and workmen in its financial security. Un-
derlying this practical reason is the assumption that if industry de-
mands a reserve of labor it should help support it through the lean
years. The contribution of the workman would seem justified be-
cause it is he who benefits. The uniform contribution was necessarily
adopted because of the lack of actual data upon which to grade pay-
ments in proportion to the hazard of each industry, the age, or the
wage of each employee. Statistics indicated, however, that there
was a variation in the incidence and the duration of unemployment
between different branches of the insured trades, a variation which
it was planned to meet by granting a weekly benefit of 75. ($1.70)
in the engineering trade and of 6 s. ($1.46) in the building group.
This plan did not meet approval, and instead a uniform benefit of
7 s. ($1.70) a week for all trades was adopted.
A modification of the flat rate was provided for the employer of
regular workmen, for whom a refund of one third of the contribu-
tions was made for each man employed continuously for one year and
for whom at least 45 contributions had been paid. Under this ar-
rangement, up to March, 1914, an average refund of 3 5. 6 d. (85.17
cents) had been made for each of 574,000 workers, or one fourth of
the insured. Simplifications were introduced by the amending act of
1914, which stipulated that payment of 45 contributions was sufficient
to entitle the employer to a refund of 3 i. ( 73 cents) for each workman
6o TRADE UNIONISM AND LABOR PROBLEMS
so employed. A similar refund is made to the employee when he has
reached sixty, if he has made 500 contributions to the fund. He then
receives the difference between the amount he has contributed and
that received in benefits, together with compound interest at the rate
of 2j4 per cent a year. This arrangement, which turns insurance into
a savings fund for the old age of those seldom out of a job, has been
an important factor in decreasing the hostility of the better workmen,
who otherwise might feel that the act held nothing for them.
The possibility that contributions would not be sufficient to meet
the liabilities imposed by the act was faced from the outset. Pro-
vision for temporary advances, not exceeding a total of £3,000,000
($14,599,500), from the treasury was made in the original act, with
the proviso that if it should appear that the fund was insolvent the
treasury might direct the Board of Trade to alter the rates of con-
tributions or the scale of benefits. After the act has been in operation
seven years the Board of Trade may revise the rates, adjusting them
according to the amount of unemployment in each trade, provided,
however, that the contributions of employer and worker shall not be
increased by more than id. (2.03 cents) each and that the shares of
employer and employee remain equal.
The enforcement of the contributions is undertaken by inspectors
of the Board of Trade, who see that the employers duly pay their own
and employees' contributions by means of stamps, representing the
combined contributions, placed in the workers' unemployment books.
These books are obtained from the labor exchanges, are left with the
employers for stamping during periods of employment, are re-
turned to the workers on leaving positions, and are then deposited by
them at the exchanges when they claim benefits. It is the employer
who is liable for contributions, but the workman becomes liable if he
knowingly allows his employer to avoid payment. Prosecutions of
employers numbered twenty-four during the first year, ending July,
1913, and convictions were secured in all but one case. Twenty-two
cases dealt with the employer's failure to pay the necessary contribu-
tion and one with an attempt to deduct the contribution from the
employee's wage. One workman was fined for refusing to apply for
an unemployment book.
The payment of the weekly cash benefit of 75. ($1:70) to adult un-
employed workmen began in January, 191 3, after contributions had
BRITISH UNEMPLOYMENT INSURANCE 6i
been payable for six months. Benefit is not paid during the first
week of unemployment, is limited to fifteen weeks during the in-
surance year, and is paid only in the proportion of one week's benefit
for every five weeks' contributions. In the case of minors, those
under seventeen receive no benefits and those between seventeen and
eighteen receive half the benefits of an adult.
All claims for benefit must be lodged at the local labor exchange,
where the worker deposits his unemployment book and where he is
placed automatically upon the list of those looking for work. The
claimant must then prove his unemployment by signing a register
at the exchange each day within working hours, or, if he is a union
man, he may sign the union "vacant" book kept at the union offices
or at the exchange. As an alternative he may be given a card which
he carries with him and which he may have stamped by any ex-
change in the city as he searches for work. The labor-exchange
officials prefer daily signing at the exchange, because they are able
to place more easily those with whom they have frequent contact.
During the first twelve months of benefit (January, 1913, to Janu-
ary, 1914) a total of 1,144,213 claims to benefit, or a weekly average
of 22,000, were made. In the early days of the war the weekly
average increased to 45,000 for August and 33,000 for September,
1914. Since the first dislocation of industry the weekly quota has
steadily declined, so that for March, 1915, the weekly average was
8229 ; for March, 1916, 3535 ; and for August, 1916, 1920. This
decline is reflected in the total number of claims shown in the fol-
lowing table for 1913, 1914, 1915, 1916 :
Numbers of Claims for Unemployment Benefit
1913 I,i44>2i3
1914 1,220,359
1915 380,710
1916 (10 months) 122,902
These claims involved an expenditure of £497,7^5 ($2,422,178.71)
for 1913, iS42,499 ($2,640,071.38) for 1914, £132,349 ($644,076.41)
for 191S, and £39,483 ($192,144.02) for the first ten months of 1916.
Here, too, the effect of the diminished unemployment has made itself
distinctly felt.
62 TRADE UNIONISM AND LABOR PROBLEMS
Payment is made only after it has been ascertained that the statu-
tory qualifications for benefits have been fulfilled. During the first
benefit year qualifying conditions threw out 102,000 claims, or 9 per
cent of the total.
The first qualification for benefit under the act of 191 1 was em-
ployment in an insured trade for twenty-six weeks during the past
five years. Proof of this was especially difficult for nonunion men,
and although rigid proof was not demanded, the lack of accept-
able evidence caused 36 per cent of the disallowances during the
first benefit year. The amending act of 19 14 remedied this difficulty,
of which unionists complained, by reducing the requirement to the
payment of ten contributions. The second qualification is the in-
ability of those capable of work to obtain suitable employment.
The determination of what is suitable work is one of the nice ques-
tions which demand a knowledge and a full understanding of the
conditions of work which a man is justified in refusing. The funda-
mentals of the decision are laid down in the act ; namely, that a
man shall not be considered to have refused suitable work if he has.
refused a job vacant because of a strike, or, secondly, if in his own
neighborhood the wages and the conditions of work are less favor-
able than those which he has habitually obtained, or, thirdly, if the
wages and working conditions offered him in another district are
not those generally observed in that area. This provision, which
depends wholly upon its interpretation, is, on the whole, being carried
through in the spirit of the law, according to trade-union critics.
The accepted standard of wages in districts which are well organized
is the union rate, while in others wages paid by the better firms have
become the criterion.
Men who have fulfilled these conditions must be without work for
a week, for which no benefit is paid, before they are entitled to bene-
fit. This so-called waiting week covered 29 per cent of the unem-
ployment recorded within the first six months of benefits, even
though this week for which no benefit is paid is credited as the
waiting period iot subsequent unemployment occurring within six
weeks.
Since the act aims to cover only involuntary unemployment, it
disqualifies from benefit men who are out of work because of a trade
dispute at the factory at which they are employed, those who have
BRITISH UNEMPLOYMENT INSURANCE 63
been discharged for misconduct, and finally those who voluntarily
leave a position without just cause. In this instance disqualifica-
tion is limited to a six weeks' period after leaving employment. To
ascertain these facts a form is sent to the last employer, who is asked
if the applicant lost his job through any circumstances which should
disqualify. If no reply is received the local officer is compelled to
assume that the claim is valid, unless suspicious circumstances sug-
gest themselves. It is probable that from 10 to 15 per cent of the
claims are questioned because of the nature of the reply of the
employer. In the absence of penalty for misstatement from the em-
ployer the unionists feel that a statement from a prejudicial fore-
man may deprive a man of benefit unjustly.
An analysis of disallowed claims showed that disqualifications
because of a trade dispute accounted for just over 1 7 per cent of the
refusals of benefit during the year January, 1913, to January, 1914.
The administration of this clause is unsatisfactory to the unions,
because they have been unable to get a general ruling from the
umpire as to what constitutes a trade dispute and because in specific
instances they have not agreed as to what constituted a strike or
lockout. Equally unpopular is the interpretation placed upon the
act which debars a man from benefit when thrown out of work by a
strike at his works, even though his department is unemployed only
because of the absence of the other men. The two remaining dis-
qualifications— misconduct and voluntary leaving without just
cause — accounted for 38 per cent of the claims disallowed during the
same period. In deciding whether a man has just cause for throw-
ing up a job considerations enter which affect the minimum stand-
ard of employment — whether a man is justified in refusing to submit
to working conditions to which he has grown accustomed during the
last few years or whether he is justified in leaving for a higher wage.
Provision is made in the act for difference of opinion on such
questions. The insurance officer attached to each of the eight divi-
sional offices passes upon the claim. If payment is authorized, he
notifies the local exchange where the claim originated. If the officer
decides against the workman, the latter may appeal to a court of
referees. These bodies consist of an impartial and salaried chair-
man designated by the Board of Trade, and a representative of the
workers and of the employers drawn from a panel to which the
64 TRADE UNIONISM AND LABOR PROBLEMS
workers' representatives have been elected and to which the em-
ployers' have been appointed by the Board of Trade. During the
first six months of benefit about one out of each twelve disallowed
claims was appealed to a court of referees. If this court confirms the
decision of the insurance officer against the workman, this closes the
case; but if it disagrees, appeal may be carried by the officer to
the umpire, whose decision is final. His judgment as to whether a
man has just cause for leaving or whether he has refused suitable
employment affects the mobility of labor by standardizing the con-
ditions upon which workers may quit work and still draw benefit.
These decisions, in the words of the New Statesman,
have clearly, on the whole, been marked by a conception of the duty
of the workman to uphold his standard of working conditions which
is sufficiently broad-minded and generous to go far toward securing
the smooth and satisfactory working of the unemployment insurance
scheme. . . . The system of unemployment insurance is clearly
capable of being made one of the great bulwarks of the standard of
life of the working class.'^
The administrative machinery intrusted to the Board of Trade is
relatively simple. The United Kingdom is divided into eight divi-
sions, each of which has charge of the claims in its district and super-
vises the placement work of the exchanges. The latter handle all the
initial claims, obtain work if possible, and notify the divisional office
of the claim. The investigation and authorization of all payments
is then made by this office, which notifies the local exchange whether
or not benefit is payable. The exchange then acts upon this notifi-
cation.
The local administration is controlled through Board of Trade
regulations, which enunciate the procedure followed throughout the
Kingdom. Further power is centered in the Board of Trade in its
control over the unemployment fund, subject to the audit of the
comptroller and auditor general, and in its discretion as to the in-
vestment of the funds which may be invested by the national debt
commissioners.
An important adjunct in the administration is the cooperation of
trade-unions having members in the insured trades. Under section
105 of the act an "association of workmen" may make arrangements
'^New Statesman, August i, 1914.
BRITISH UNEMPLOYMENT INSURANCE 65
whereby it pays to its members the benefit they would have received
under this act. Three fourths of the amount so paid out is then re-
paid by the Board of Trade. Such an arrangement may be made
only on the condition that the union itself pays a benefit which is at
least one third of the state benefit, has some method of proving the
unemployment of its members and of notifying them of vacant posi-
tions. In practice the members of unions with such an agreement
make their initial claim at the exchange and sign the union vacant
book, which may be kept at the union offices, but which very fre-
quently is found at the exchange. The claim is then forwarded to
the divisional office, which reports to the exchange, as in other cases ;
the exchange then notifies the union secretary, who makes the pay-
ment, as to whether benefit is authorized. Since repayment to the
union is made only for benefit which the labor exchanges would have
paid if the claim had been made to them, it is important that the
union secretary have the Board of Trade authorization for each
payment made. At first difficulties were encountered, because the
warm-hearted branch secretaries thought that they could pay state
benefit with the same freedom with which they were accustomed to
pay union out-of-work benefits ; as a result payments were made
with an unjustified expectation of a refund and consequent disap-
pointment. It not infrequently happened that failure to obtain the
anticipated repayment was due to inaccurate union bookkeeping
which failed to pass the government auditor.
At the close of the first year, July, 19 13, one hundred and five
unions, with a membership of 539,775, including practically all
the unions in the insured trades, had made this arrangement. This
plan, necessitating the recording of union payments apart from those
of nonunion men, has been the means of accumulating valuable in-
formation as to the incidence of unemployment among organized
and unorganized workers. During the first year of benefits, when
union men numbered approximately 25 per cent of the insured,
union claims constituted 28 per cent of the total and absorbed
26 per cent of the expenditures. In general the unemployment
of union men was shorter than of nonunionists— an average of
12.2 days as against 16.2 days. Since August, 1914, the union claims
have been absorbing a phenomenally increasing proportion of the
sum spent in benefits, amounting to 47 per cent of the expenditure
66 TRADE UNIONISM AND LABOR PROBLEMS
in January and February of 1916 and falling again to 30 per cent
of the expenditure in August of 1916.
The cooperation with trade-unions has extended to all unions
giving out-of-work benefit voluntarily to members. Unions, whether
in insured trades or not, may receive a subsidy of one sixth of the
total amount expended upon out-of-work benefits up to a maximum
limit of 175. ($4.14), including the j s. ($1.70) of state benefit.
Where the total benefit is less than 13 s. ($3.16), a portion of the
state "J s. ($1.70) is excluded in reckoning the total.
The advantages of this section up to July, 19 13, had been claimed
by 103 unions which also had arrangements under section 105, and in
addition by 172 unions, with a membership of 376,041, in the nonin-
sured occupations. A few of the large unions, such as the Durham
Miners' Association and some of those among the cotton workers,
have hesitated to apply for the subsidy because of their objection to
a government audit of this expenditure and to signing an unemploy-
ment register.
Less difficulty has been experienced by the trade-unions in claim-
ing this refund, because the requirements are not as stringent as those
for a refund under section 105. For example, the statutory qualifi-
cations are not required in this instance ; all that is necessary is for
the union to certify that unemployment is not due to a trade dispute.
The accounts of this expenditure are then subject to government audit
before repayment. The ease with which unions have obtained the
refund has been accompanied by departmental difficulties. Objec-
tion was raised by the war-time committee on retrenchment in public
expenditure that many claims had been paid without detailed evi-
dence as to their accuracy. The absence of a receipt from the work-
man that he had received this benefit and the general lack of proof
that unemployment had come within the prescribed limitations in-
creased the difficulties of the committee on public accounts in passing
claims for repayment. As a result the audits have been slow, and
amounts have been paid over to associations for which there was no
proof of correct payment. Dissatisfaction extended to the treasury,
which felt, according to the committee on public accounts, that a
more satisfactory basis should be worked out by a special committee.
A marked reduction in the parliamentary appropriation for this
purpose was presented in the budget for 1916-1917. Instead of the
BRITISH UNEMPLOYMENT INSURANCE 67
annual sum of £70,000 ($340,655) set aside during the first two years
and of £100,000 ($486,650) for the year 1915-1916, only £25,000
($121,662.50) appeared in the budget estimates for 1916-1917. The
combined result of this dissatisfaction, of the exceptional prosperity
during the war, and of the insistent demand for national economy has
been the withdrawal of the subsidy of one sixth after May 31, 191 6.
Protests have been made and a deputation from the trade-union
congress sought an explanation from the Board of Trade. They were
told that nothing would be done during the present period of pros-
perity, but that the question would be reconsidered "when trade
resumed its normal aspect."
The war has brought its own peculiar problem as to the insurance
act. In the early fall of 1914, after the unemploynient rate had taken
a suddenly alarming upward trend, the Board of Trade announced
that it would give an additional subsidy to trade-unions paying out-
of-work benefits. Grants were to be made upon the condition that
there was abnormal unemployment among its members, that the asso-
ciation was not paying out more than 175. ($4.14) weekly in benefits,
including the state "j s. ($1.70), and that the union would impose a
special levy upon its employed members. The amount of this emer-
gency grant was set at one third or one sixth of the benefits (in
addition to the refund of one sixth already provided in 'the act) ,
depending upon the amount of the weekly levy. Applications for
this emergency grant were made by 185 associations, with 284,297
members. Of these, 135 unions (with 221,413 members) were in
the cotton trade. This grant in aid was paid for expenditure in-
curred up to the close of May, 1915, when a total of £84,175 ($409,-
637.64) had been expended. Of this sum £70,565 ($343,404.57)
was paid to unions in the textile trades, many of which had held
aloof from the grant of one sixth under section 106 of the act.
Unemployment insurance has opened the way for dealing with the
unemployment problem anticipated on the close of the war. The war
office announced that it had undertaken to pay unemployment insur-
ance benefits for one year to those who would be discharged from the
army, regardless of the trades they entered. The Admiralty have had
a similar plan under consideration. In the meantime an amending
act was passed in July of 191 6 extending the provisions of the act
to those engaged in munition work ; in sawmilling, including machine
68 TRADE UNIONISM AND LABOR PROBLEMS
woodwork and the manufacture of wooden cases ; in the manufacture
of chemicals, including oils, lubricants, soaps, candles, chemicals,
paints, and varnishes ; the manufacture of metals, of rubber and
rubber goods, of leather and leather goods, of bricks, cement, and
artificial stone. These provisions are 'expected to include an addi-
tional 1,500,000 workmen. Extension may be made by the Board
of Trade where there is a substantial amount of war work being
done in any trade. In addition, workmen employed in an establish-
ment in which some are insured may elect to come under the act,
provided the employer consents. The plan which came into opera-
tion in September is but a temporary arrangement, in force for not
more than five years, or not more than three years after the ter-
mination of the war, or such shorter period as the Board of Trade
may determine.
The finances under the main act thus far have proved perfectly
satisfactory. These are based upon data relating to the unemploy-
ment of 540,000 trade-unionists in the insured trades over a period
of years, data which showed an average rate of unemployment of 8.6
per cent, or 26.8 days a year after an actuarial weighting. The
period during which the insurance act has operated has been one of
phenomenally low rate of unemployment ; at no time, except during
the fall of 19 14, has the rate, minus the actuarial weighting, risen
above 3 per cent, while the rate for 19 16 has fallen to a fraction of
I per cent. These favoring circumstances have, of course, colored
the entire history of the act.
The total income of the first year (1912-1913) was £2,011,304
($9,788,010.92), of which £362,397 ($1,763,605) was expended on
benefits and administration,^ leaving a balance of £1,648,907
($8,024,405.92) for investment. The second year (1913-1914) showed
a slight increase in income — £2,497,160 ($12,152,429.14), of which
£896,160 ($4,361,162.64) was spent on benefits and administration,
^This does not represent the total spent on administration, since the major
portion is included in the annual appropriations for labor exchanges. But of
the total appropriation of £1,167,962 (85,683,887.07) made for labor exchanges
and insurance during 1916-1917, it is impossible to ascertain the amounts
chargeable to the respective accounts. A substantial share of the administrative
expense attributable to insurance is covered by the grant of 10 per cent of the
income derived from employers and workmen, according to the report of the
committee on , retrenchment in public expenditure.
BRITISH UNEMPLOYMENT INSURANCE 69
leaving a balance of £1,601,000 ($7,791,266.50). The period of
industrial activity during four years has placed the fund in a
strong financial position, so that in July of 19 16 the fund had
approximately £6,700,000 ($32,605,550) standing to its credit.
During this period the act has achieved what it attempted ; namely,
provision of relief for the unemployed upon a dignified basis. The
benefit afforded within the limitations of the act proved adequate in
a study of 130,000 cases during the first six months of benefit.
Aside from the 29 per cent of the unemployment recorded ac-
counted for by the waiting week, 9 per cent which was not covered
by benefit was almost entirely accounted for by the statutory dis-
qualifications. Less than i per cent of unemployment was uncovered
because of exhausted benefits. Although the small proportion re-
maining without the scope of the act presents a flattering picture,
it must be remembered that men are less likely to claim if they
have exceeded their allotted portion of benefit. As a result, men
may be out of work without the knowledge of the Board of Trade.
The figures are further colored by the fact that they are taken from
the early days of the act, before many had had an opportunity to
exhaust their benefit.
But the act has done more : it has encouraged the growth of
voluntary provision. During the initial eighteen months twenty-
one trade-unions, with a membership of 86,000 in the insured trades,
which formerly paid no benefit, began an out-of-work benefit. In
practically all cases the total benefits — including the state 7 s.
($1.70) — is below 12 s. ($2.92) a week. The subsidy of one sixth
to other trade-unions has proved less successful, for only three
trade-unions outside the insured trades had established an out-
of-work benefit in July, 1914. The explanation of this is two-
fold : first,' that the unions which had not had this benefit feature
previously were too poor to afford it and, second, that the grant has
been too small to encourage them in what they still consider a
perilous undertaking.
The grants under sections 105 and 106 have, on the whole, tended
to strengthen the financial position of this trade-union benefit. For
example, an old and well-established society, such as the Amalga-
mated Society of Engineers, added the state benefit to its own of
10 s. ($2.43). Other societies receiving the subsidy of one sixth
70 TRADE UNIONISM AND LABOR PROBLEMS
have increased their benefits, as, for example, the British Steel
Smelters' Association and the Workers' Union. The London Society
of Compositors, even though it is not cordial to this government
activity, considers this grant an aid to their funds.
Achievements in the prevention of unemployment, through the
pressure of insurance contributions, have not been to the fore in
years of exceptional prosperity. The possible future effect of the
preventive measures, such as the refund to employers for regular
workmen, the higher rate for casual labor, and the remission of the
employers' and workers' contributions when short time is worked
systematically as a substitute for reduction of working force during
a time of trade depression, cannot be foretold upon the basis of
four years of feverish industrial activity when the absence of pres-
sure may have accounted for the belief of employers that the induce-
ments offered were too slight to have any effect.
The most significant testimony of the success of the new method of
dealing with unemployment as an industrial problem is the extension
of the principle of insurance to meet some of the war-unemployment
problems- — the unemployment in the early days of the war, that
occurring when soldiers are discharged from the front, and that due to
the cessation of war orders. It is a method which has commended
itself alike to the government official, to the general public, and to
the workingman, who prefers this provision for unemployment on a
business basis to the humiliating and pauperizing system of poor-law
and charitable relief.
[On December 23, 1919, an unemployment insurance bill esti-
mated to embrace 11,750,000 persons was introduced in the British
Parliament. This bill would repeal existing legislation and would
build up a more extensive plan along the lines adopted in the legis-
lation here described. It is proposed that the rate of benefit be
increased to 155. per week in the case of men and 12 s. per week in
the case of women. The contributions in the case of men will be
at the rate of 7,d. per week from both men workers and their
employers and in the case of women 2j4d. per week from workers
and employers each. — Ed.]
Olga S. Halsey
American Association for Labor Legislation
V
TRADE-UNION SICKNESS INSURANCE^
MY AFFILIATION with the International Typographical Union
began in 1887, and one of my earliest; recollections concerns
the troubles attendant upon the administration of the Union's sick-
benefit fund, which was finally abolished because, as I can see now,
the methods of administration employed were not correct. There was
lack of precedent and experience on which to base sick-benefit laws,
and the abuses resulting because the funds were not properly guarded
caused early death to a valuable feature of union policy.
For years, both as member and officer, I was opposed to trade-
union-sick, out-of-work, and other relief measures, holding that
they were outside the trade-union field, which should be restricted
to the regulation of hours, wages, and working conditions. How
far the leaven of progress has worked in my case may be gauged
by the relief laws now on the books of the International Typo-
graphical Union, of which I was the executive officer for thirteen
years ; and nearly all of these features were added during my in-
cumbency as president. I will refer to them specifically further on.
As I show in this paper, the officials of the great trade-unions
now recognize the value of benefit features as builders of unions, as
conservators of the membership of these unions, entirely aside from
their assistance to the members as safeguards against financial loss
during physical adversity.
One of the most direct benefits which a trade-unionist derives
from membership in his organization is his participation in the
various forms of insurance which are open to him by virtue of such
membership. In fact, some of the first trade societies in this coun-
try were organized primarily as friendly and benevolent societies.
During the latter part of the eighteenth century and the first quarter
of the nineteenth the modern conceptions of wage class and wage
iFrom American Labor Legislation Review, Vol. IV (1914)1 PP- 82-91.
71
72 TRADE UNIONISM AND LABOR PROBLEMS
earner were unknown, because there had not yet developed a dis-
tinctive group of worlcmen dependent upon wages alone for their
livelihood. Capital had not yet learned its ability to control and
direct industry. The master workman of that period was at once
workman, employer, and merchant capitalist. He owned the few
necessary tools, purchased the raw material, hired the necessary
help, if any, to aid him in preparing his product for market, and
retailed his wares to his customers. Sometimes he worked on orders.
In either case he dealt only with the producer of raw material and
with the consumer in price determinations and with his helpers or
journeymen in wage determinations. Since it was the expectation of
every journeyman some day to become a master workman, and since
the functions of master and journeyman were at times interchange-
able, there was a very real identity of interest between master and
man. Instead of organizations to fix wage scales, combinations to
fix prices were more pertinent. These were not uncommon. But
more often friendly and benevolent societies, including in their mem-
bership both masters and journeymen, were developed as mutual in-
surance companies. All of these were purely local in their jurisdiction,
and nationalization was not even considered.
The half century beginning in the thirties witnessed revolution-
ary changes in American industrial life. The merchant capitalist,
and a little later the merchant jobber, appeared to exercise the
functions of middleman between the producer of raw material and
the master workman on the one hand and the master workman and
the consumer on the other. This made of the master workman a
mere contractor. By playing one such contractor against another
in receiving bids for work, the merchant capitalist was able to re-
duce the prices which he paid. The contractor, in turn, in order to
keep in the race for commissions, shaved the wages of his journey-
men. This forced the question of wages ahead of all other consider-
ations in trade organizations and relegated the fraternal and insurance
features of the earlier friendly societies to a minor position in their
program.
The masters retained their membership in these new societies
until, in the further deveiopment of the capitalistic function, they
lost their identity as tool and machinery owners and contractors and
became instead mere superintendents. By this time the trade
TRADE-UNION SICKNESS INSURANCE 73
societies had begun to assume many of the earmarks of modern trade-
unions, and the masters either withdrew or were forced to resign
from membership. During this period many of the benevolent so-
cieties relinquished their insurance benefits and reorganized as trade-
unions ; others retained their benefits and added restrictive measures
for the government of their members. Although the era of national-
ization of trade-unions began at this time, the insurance features
which were retained from the earlier societies were still adminis-
tered by local unions. In fact, the leaders of the national movement
at first discouraged benefits, on the ground that the development of
such activities would hinder the enforcement of trade regulations.
In the present period of our industrial life, beginning with the
last quarter of the nineteenth century, changes have been largely
of degree rather than of kind. The capitalist has extended his ac-
tivities and with them his power to direct and control the currents
of industry. The workman has become more wage conscious and
has banded with his fellows into strong national unions in an
effort to establish and maintain standards of wages and working
conditions. With this emergence of a group of workmen, separate
and distinct from all other classes in their primary efforts to earn
a living, have appeared problems to which the wage-earners as a
class, and more especially as members of a particular union, have
directed their attention.
With the return of prosperity following the close of the Civil
War, this new element in the industrial population — the trade-
unionists — sought for means by which they could insure themselves
a place of increasing importance in the social scheme. Savings banks
grew apace and mutual insurance societies became the order of the
day. Of the enormous flood of immigrants, many had had experience
in friendly societies in England. These, together with those Ameri-
can trade-unionists who still retained their faith in the benefit
systems of the earlier trade societies, succeeded in interesting large
numbers of wage-earners in the institution of mutual insurance
within their own organizations. They were aided in their efforts
by the public opinion of the time, which looked to, the trade-unions
for the solution of the problems which faced the wage-earners.
Gradually the earlier opposition of the national trade-union lead-
ers to benefit systems was either broken down or was overridden,
74 TRADE UNIONISM AND LABOR PROBLEMS
so that by 1880 the national leaders were beginning to find reasons
why benefit clauses should be incorporated in, rather than excluded
from, their constitutions. It was argued that beneficiary features,
whether or not they attracted members to the union, undoubtedly
helped to retain them during a period when they might otherwise
withdraw from membership. And since one of the big problems
which every trade-union must face is the prevention of declinations
in membership during industrial disturbances, this new theory of
benefits was not without its effects.
The Granite Cutters' Union was the first national union to adopt
a system of national sick benefits. This was introduced in 1877 and
was made voluntary in its operation. The plan was not successful,
and the sickness-insurance association was dissolved in 1888. The
first national union to inaugurate a compulsory sick benefit was the
Cigar Makers' Unic^, in 1880. Its success was immediate and its
popularity grew rapidly. The German-American Typographia pro-
vided in its first national constitution, adopted in 1873, for the pay-
ment of sick benefits by the subordinate unions. This system proved
unsatisfactory, and in 1884 the national sick benefit was adopted.
Other prominent unions which have since adopted national sick
benefits are: Barbers, 1893 ; Iron Molders, i8g6 ; Tobacco Work-
ers, 1896 ; Piano and Organ Workers, 1896 ; Pattern Makers, 1898 ;
Leather Workers on Horse Goods, 1898 ; Boot and Shoe Workers,
1899 ; Garment Workers, 1900 ; Plumbers, 1903. Other national
unions which have given much attention to the subject include the
Typographical Union, the Brotherhood of Carpenters and Joiners,
the Painters, the Wood Workers, and the Machinists.
The International Typographical Union manifested but little in-
terest in the establishment of a sick benefit prior to 1892. Since
that time the subject has been discussed at several national conven-
tions and has even received the indorsement of international officers
of the Union, but the proposal has been defeated in convention.
The Union Printers' Home, however, cares not only for aged mem-
bers but for many afflicted with diseases of the respiratory organs.
Members who are afflicted with disease that makes their admission
to the, home inadvisable are, if otherwise eligible, placed on the
union's pension roll. A pension of $5 per week is paid to all in-
capacitated members sixty years of age or over, and there are also
TRADE-UNION SICKNESS INSURANCE 75
mortuary benefits ranging from $75 to I400 according to length of
membership.
It is not possible to give a significant summary of the extent of
national trade-union sickness insurance in the United States at the
present time. Twenty-seven of the unions affiliated with the Ameri-
can Federation of Labor paid out in national sick benefits during the
year ending September 30, 1913, a little over $800,000. Of this
amount the Cigar Makers' Union alone paid out $200,000.^ Be-
cause this union best shows what is possible in national-union sick
insurance, a brief statement of the history of this feature of the
Union's policy is pertinent here. Beginning in 1881 with a total
sick-benefit payment of less than $4000, the annual amount has
steadily increased until in 1911 it for the first time reached $200,000.
The per capita cost of this sick benefit has likewise increased from
27 cents in 1881 to $3.73 in 1905, since which time it has remained
nearly constant, although during the last two years it has been
slightly more than $4. Every member of the Union is entitled to
participate in sick benefits. Members leaving the trade may ob-
tain a trade "retiring card" which entitles them to sick benefits as
long as they maintain the payment of a certain proportion of the
regular dues. Sick members are entitled to receive $5 per week for
a period not to exceed thirteen weeks in any one year ; no payments
are made for sickness of less than seven days' duration. A mem-
bership of one year is required before the member is entitled to
the sick benefit. Sickness caused by intemperance, debauchery, or
immoral conduct is not accepted as a cause for claiming benefits.
By far the greater proportion of trade-unionists who are pro-
tected by sickness insurance receive support from local rather than
from international unions. Of the 530 local unions reported in the
iThe exact figures are: Total amount, all unions, 1816,33641; Cigar Makers,
8204,775.61 ; Holders, $159434 ; Western Federation of Miners, $96,066.44 ;
Boot and Shoe Workers, ^74,790.81 ; Hotel and Restaurant Employees, $58,-
gii.o6 ; Plumbers, $47,000 ; Barbers, $46,185.91 ; Bakers, $33,870 ; Tai}ors,
$22,099.80; Retail Clerks, $14,225; Iron and Steel Workers, $10,515; A. F. of L.
locals, $8813.06; Photo Engravers, $7865.51; Patternmakers, $7053.04; Painters,
$6400 ; Tobacco Workers, $S9i7 ; Cloth Hat and Cap Makers, $3859 ; White
Rats Actors, $2156.67; Stonecutters, $2000; Diamond Workers, $1600; Steel
and Copper Plate Printers, $1280; Wire Weavers, $350.50; Travelers' Goods and
Leather Novelty Workers, $300; Foundry Employees, $245; Shingle Weavers,
$69; Pocket Knife Blade Grinders, $54.
76 TRADE UNIONISM AND LABOR PROBLEMS
volume on "Workmen's Insurance and Benefit Funds in the United
States," prepared in igo8 under the direction of the United States
Commissioner of Labor, 308 pay sick benefits. These vary from
$1 to $10 per week, while Is per week is the amount most often
paid. The maximum periods for which sick benefits are provided
vary from five weeks in one year to unlimited time, with thirteen
weeks in any one year as the most common. Generally the period
of illness must continue for seven days or more at any one time
before benefits may be claimed. The number of days at the be-
ginning of the illness for which benefits are not paid varies from
none to twenty-one, while seven is the most common. The length
of membership required in order to establish a right to claim bene-
fits for sickness varies from no time at all to one year, with six
months the most common. Most unions require the presentation
of physicians' certificates and the investigation of sick-benefit claims
by union sick committees.
While the International Typographical Union does not maintain
a national sick-benefit fund, its local branches have perfected three
separate forms of insurance against illness. These may be called
the local-union sick-benefit insurance, the union-auxiliary mutual-
aid insurance, and the union chapel or shop insurance. The first
of these — the union sick-benefit insurance — is typified in the con-
stitution of St. Louis Typographical Union No. 8. All members
of this union who have been in continuous good standing for six
months and who are incapacitated for work for a period of two
weeks or longer are entitled to receive from the Union a weekly
benefit of $5 for a period not to exceed twelve weeks in any one
year. If the illness is of such a nature as to require hospital ac-
commodations, the Union stands ready to pay hospital charges not
to exceed $7 per week in lieu of the weekly sick benefit. Neither
sick nor hospital benefit is extended to cases of alcoholism or to
cases of chronic, contagious, or venereal disease.
The second form of sickness insurance among printers' — the
union-auxiliary mutual-aid insurance — is represented in the Chicago
Union Printers' Mutual Aid Society. This society is a mutual in-
surance association organized solely for the purpose of giving finan-
cial aid and assistance to its members in time of sickness or accident.
No person is eligible to membership who is not already a member in
TRADE-UNION SICKNESS INSURANCE 77
good standing of Chicago T3rpographical Union No. 16. Members
when sick are entitled to receive $10 per week for a period not to
exceed twenty-six weeks in any one year, provided their illness lasts
for two weeks or longer. Membership in this society is voluntary
and is not required of members of Typographical Union No. 16.
Nevertheless, the Union encourages its members to join the society,
and to effect this end it has abolished all union relief in case of
sickness, except to those members whose applications for member-
ship in the society have been rejected on account of their inability
to pass the required medical examination. In such cases the union
may grant relief by extending a loan of not more than $25 in
ordinary cases to sick and destitute members.
For an example of the third form of printers' sick benefits — the
union chapel or shop insurance — we maiy refer to the Composing-
room Relief Association of the New York World. Perhaps it is not
quite accurate to call this association a union insurance society,
since membership in a union is not required of all members in the
association. Yet we call this a form of union chapel or shop in-
surance, because, except for this omission, it t3fpifies that group of
chapel and shop insurance organizations which do require of appli-
cants for membership the presentation of a union card. This asso-
ciation was organized originally for the benefit of compositors alone,
but it now includes among its 500 members editors, writers, employees
of the business and circulation departments, stereotypers, press-
men, "and mailers as well. Upon the payment of weekly dues of
fifty cents, its members when sick are entitled to receive $10 per
week for a period not to exceed twenty-six weeks in any one year.
Under certain conditions the dues may be increased in individual
cases to $1 or $1.50 per week and the benefits to $20 or I30 per
week accordingly.
Whether administered by the international union or by the subor-
dinate locals, the sick benefit is intended to provide insurance against
illness which temporarily incapacitates the wage-earner for his regu-
lar work. Members are usually debarred frorti such benefits in
case of illness due to "intemperance, debauchery, or other immoral
conduct"; and in some cases illness caused by "the member's
own act " may not be used as a basis for benefit claims. In no case
is the sick benefit intended to constitute a pension for members
78 TRADE UNIONISM AND LABOR PROBLEMS
suffering from chronic disability. The time limit during which a
member may receive insurance in any one year prevents this. Some
of the unions, notably the Iron Molders and the Boot and Shoe
Workers, go even further and provide for retiring such members
from the privilege of sick benefits in case they attempt to draw
the maximum amount year after year.
The limelight of publicity has been turned upon industrial acci-
dents and occupational diseases. As a result, individual students of
social problems, philanthropic organizations, and state and national
departments of labor are beginning to learn about the hazards of
industrial life. The more knowledge we obtain, the more eager we
are to embody it into measures which will prevent such accidents,
do away with the necessity for exposure to occupational diseases,
and compensate the sufferer and his family. Our former insistence
upon the competence of voluntary action to deal with accidents and
diseases in which the factor of the inherent risks of the industry is
so great is being displaced by a belief in the necessity for com-
pulsory insurance administered by governmental authority. Fol-
lowing closely upon the heels of the demand for compensation
legislation is the cry for old-age pensions, mothers' pensions, and a
host of other reforms which abroad have already become realities,
but which in America are just being divested of the stigma of
socialism and paternalism.
In some of these proposed reforms it is not very easy to trace a
causal relationship between the condition which demands a remedy
and society's responsibility for that condition. Still more difficult
is it to measure social responsibility in considering what we are
accustomed to call the private misfortune of ordinary illness. But
the fact femains that we are forced to recognize the presence of
a vast deal of sickness among wage-earners, against which no pro-
vision has been made and for which relief is necessary. Some day
we may be asked to provide compulsory state or national insurance
against this also. At present we must look to other agencies. The
trade-union, and especially the international union, is peculiarly
fitted to administer sickness insurance. For the most part, each local
union is made up of people of the same nationality, of similar habits
of life, resembling each other in physical make-up, and subject
to similar risks and exposures. They know one another personally
TRADE-UNION SICKNESS INSURANCE 79
and are able to detect imposture in the rare cases where this is
attempted. Then, too, sickness insurance, when conducted on the
local mutual plan, requires neither large reserves nor a great invest-
ment of funds. When conducted by an international union, there is,
of course, need for a reserve fund, and there is also greater care
and more approved business methods in the disbursement of money.
Therefore, whatever may be our ideas of the activity of govern-
mental agencies in other forms of industrial insurance, we must
admit that for the present at least we are not ready for the state to
insure our wage-earners against sickness. We must also recognize
that at present wage-earners as a class cannot, or at least do not,
make individual provision for temporary disability due to illness.
What is not done individually must be done collectively if at all.
It is for these reasons that we believe in trade-union sickness in-
surance and that we are ready to offer it encouragement.
Judging from some of the opinions expressed here today, there
may be criticism of trade-union sick-insurance methods on the
ground that all of the funds are contributed by employees, the em-
ployer not bearing a share of the expenditures. FrOm a somewhat
extended experience it is my conviction that in a well-organized
industry the employer does contribute, — indirectly, it is true, but
actually none the less, — for the cost to the union member is later
used by the union as an argument for an increased wage scale, and
is so accepted by employers, in the printing industry at least. All
the benevolent features of the International Typographical Union,
including the pension fund from which 11 00 members are now
drawing pensions, the mortuary fund, and the Union Printers' Home,
are supported by the members.
It was said here today that compulsory insurance is never en-
thusiastically supported. Thousands of our members voted against
the mortuary and pension laws ; but the majority vote was for these
laws, and they are compulsory. They have been in effect for several
years, and if they were resubmitted now, I am satisfied that there
would be a comparatively small vote against them.
As far as a joint fund for such benefits is concerned, I am satis-
fied that even with a board of directors of seven twelfths for the
employees and five twelfths for the employer, the latter would dic-
tate the policies and control the fund. Naturally the wage-earners
8o TRADE UNIONISM AND LABOR PROBLEMS
look askance at these company-instituted and company-controlled
funds, as they give the impression that they are instituted in order
that the worker may be more firmly bound to the industry and less
liable to form industrial organizations for the regulation of hours,
wages, and working conditions. I am opposed to any scheme which
takes out of the pay envelope the "contribution" of the employee.
He should "receive his wages in full.
A strong union, capable of protecting the rights of the individ-
ual, can successfully conduct sick-insurance features. Unorganized
workers will find their best protection in state-supervised or state-
instituted sickness insurance, for they will not then be at the mercy
of the rapacity or greed or kindness or charity of the employer.
The state, and not mixed directorates, will see that full and even
justice is accorded.
With the general adoption of compensation for industrial acci-
dents will come reasonably safe factories, for these laws will do
as much for safety as the inspection service of the state departments
of labor. Properly guarded machinery will mean a lower insurance
rate. Following compensation for industrial accidents will come
compensation for industrial diseases, and this will in turn mean
reasonably safe factories from a health standpoint. Both will raise
the standard of living, and a higher standard of living will mean a
healthier people and less sickness of a general nature.
Pay to the wage-earners living wages and give them the eight-
hour day, and they will spend their money wisely and provide their
own health insurance. There will then be no occasion for worry
on the part of those employers who may have the idea that they
are the natural guardians and protectors of their workpeople, and
who seek to mold laws accordingly.
James M. Lynch
Industrial Commission of New York
VI
HEALTH PROGRAM^
THE campaign against tuberculosis has given to the American
people a new idea of the doctor. We had thought of him as a
last resort after we had doctored ourselves and tried out the patent
medicines and practiced faith. The antituberculosis movement has
begun to show us that the doctor should be first. We know that we
need him in sickness. We begin to want him also to prevent sickness.
Likewise, the workingmen's accident-compensation laws have given
us a new idea regarding insurance. We got our idea of insurance from
life insurance. Death is inevitable, and the purpose of life insurance
is the philanthropic purpose of paying uncertain but unavoidable
expenses when dead. So we thought that accidents were inevitable,
and that the purpose of accident insurance was the philanthropic
purpose of relief to injured workmen and to the families of killed
workmen. But the compensation laws have shown us that accidents
are largely preventable and that employers can prevent them. So
we have learned to think that the first purpose of accident insurance
is the business purpose of making money by preventing accidents.
These compensation laws have a double mechanism. They are
an employer's tax on accidents and a workman's insurance against
unprevented accidents. Employers can escape the tax, and thus cut
down the cost of compensation, by preventing accidents. There are
records of employers who have reduced accidents 90 per cent. Some
of them affirm that the money put into accident prevention is the
most profitable part of their business.
So a new profession has sprung up. Or, rather, those persons who
formerly practiced the profession of claim agent, for the purpose of
protecting their employers against lawsuits, have become safety ex-
perts, and they now protect their employers against the tax on
accidents, by preventing the accidents.
^By J. R. Commons. Address delivered at Fifteenth Annual Meeting, Na-
tional Tuberculosis Assodation, June, 1919.
82 TRADE UNIONISM AND LABOR PROBLEMS
I sometimes think it is more difficult to persuade the average doctor
to become a health expert and to prevent sickness than it was to
convert the claim agent into a safety expert to prevent accidents.
As a matter of fact, the claim agent fought the process of conversion
about as stiffly as he could, and it was only the overwhelming power
of a tax on accidents that converted him. Now he is proud of his
new profession, and his employer is proud of him. I occasionally
hear of employers who say what fools they were in fighting accident
compensation. The new thing certainly did look bad for them at the
time. But they are escaping the tax on accidents by devoting the
same kind of business ability to preventing accidents that they had
devoted to manufacturing and selling their product.^
It is much the same with the proposed business tax on sickness.
We read of the probable enormous cost to industry of compulsory
health insurance. It looks like bankruptcy. I am willing to accept
the figures. They are presumably based on the existing amount of
sickness, although the same insurance experts turn around and say
there is not much sickness anyhow.
The explanation is rather simple. They fail to distinguish philan-
thropy from business. If this large amount of sickness is unprevent-
able, then the cost of relief to the sick in a proper humanitarian way
will doubtless be very great. But if it is largely preventable, then
the proper American way is to offer to our business men a chance to
make a big profit by preventing it.
I believe our business men have more business ability than those
of other countries. They are ingenious, alert, they take chances, and
they know how to employ experts to work out the technical details.
In these respects they are also quite superior to our politicians and
other government officials. It is a curious fact that our insurance
experts, who try to prove to us that the purpose of insurance is not
prevention but relief, wish to turn over the prevention of sickness in
industry not to our business men who control the industry but to
our politicians. They give us attractive programs of public-health
administration, of great and efficient federal, state, and municipal
health departments, of public-health nurses, of city and county san-
atoria, hospitals, and clinics, of state health inspectors and state and
municipal factory inspectors going into the homes and factories and
^See above, p. 9.
HEALTH PROGRAM 83
vigorously enforcing a long list of beneficent sanitary laws and health
laws and factory-inspection laws.
Well, we had a good deal of experience along this line in enforcing
the factory-inspection laws which require safeguards on machinery
as protection against accidents. The factory inspector's job was a
very disagreeable and even heroic job. Occasionally he was kicked
out by an employer, or, if not kicked out of the factory, was inscru-
tably lifted out of his job. He had to collect evidence of violations
of law, and this evidence had to be sufficient to prove to a judge and
jury that the employer was a petty criminal, and the law gave to the
criminal the benefit of every doubt. Thus the factory inspector was
strung along the rocky career of a detective, sneaking in where he
was not wanted, or hustled past the dangerous machinery, and it is
no wonder that many of them became blind. Even if they did see
things, very little accident prevention came out of it. The successful
factory inspector was the one who held his job, not the one who
prevented accidents.
All of this was greatly changed when workmen's compensation,
with its tax on accidents, came in. Now the employer is not treated
like a criminal ; he is a taxpayer. But — unlike some other taxes —
he is allowed to make money by evading this tax. So he eagerly
invites the inspector to come in and show him how to escape the tax
by preventing the accidents.
But he finds that the old-time political inspector cannot see. What
the employer wants is not a detective anyhow, he wants a safety
expert. So he hires his own expert, starts a nation-wide "safety
first" campaign, cultivates the "safety spirit" in his employees and
in the public.
Then, behold, the factory inspector also begins to be transformed.
It is remarkable what influence business men have on government at
the points where they can make a profit or avoid a loss. In the midst
of even the most corrupt municipal politics they nearly always suc-
ceed in having an efficient fire department. I do not know of any
workingmen or experts in public or private employment who have
a greater pride in their job, or greater efficiency, than the city fire-
men and fire chiefs. It is because business makes money by them.
And so with the factory inspectors. When business men want factory
inspectors to be made exempt from politics, because they want them to
84 TRADE UNIONISM AND LABOR PROBLEMS
help keep down the accident tax on business, then the factory inspec-
tor becomes a new man. Government itself becomes better, for
government-in-action, at this point, is the factory-inspector-in-action.
Consequently I offer no objection to the health program of the
insurance experts who would turn over sickness prevention to the
politicians. I see a great opportunity to improve politics, to enlarge
and improve our health departments, and thus to prevent sickness.
But I do not see it effective and on a sufficiently large scale until
sickness prevention is made a source of financial profit to business
men.
This is what is intended in the program of health instirance. There
is, of course, also- a philanthropic purpose in that program, but that
philanthropic purpose is really secondary. The main purpose is the
business purpose of making sickness prevention profitable. There
does not seem to be any other way of reaching all of our business
men, as well as workingmen. Many of our big corporations have
begun to take hold of sickness prevention. They look on it as a
business proposition and they resent the name sometimes given to it
of "welfare work." The difiiculty, however, is that it is not universal
and they do not put enough business ability into it. One reason is
that it is too easy to shift the entire cost of sickness over to the
workingman and his family. The thing works automatically. When
the workman gets sick he just lays off on his own initiative and pays
his own bills if he can, and somebody else takes his place.
But health insurance is a follow-up proposition. The employer
cannot shift the entire cost over to the workmen, but must share the
cost of doctors and nurses and hospitals and medicines and must
continue to pay a part of the worker's wages even when absent from
work. It is a sickness tax on industry, coupled with an insurance
scheme in order to spread the tax over the industry and over a period
of time. But since the industry is not solely responsible for sickness,
the workman also is required to contribute to the insurance fund, and
a part of the tax is thereby spread out over his wages.
If it were not that several large corporations have already volun-
tarily adopted this plan of health insurance and set the example, we
could not know certainly how it would work. But we do know, from
their example, that it prevents sickness. I know such a corporation
that has reduced the number of days lost on account of sickness one
HEALTH PROGRAM 85
half, and the resultant increase in wages and the increase in efficiency
of workers has been much greater than the total cost of the insurance.
Another corporation figured that they stood to lose $600 on the
average on account of their workmen who came down with tuber-
culosis, because they had undertaken to provide sanatoria for the
cure of their tuberculous workmen and cash benefits for their families
while getting cured. They could save, on the average, $600 if they
could detect incipient tuberculosis before anybody suspected it. They
had voluntarily taxed themselves for the cure of tuberculosis and
then saved a large part of the tax by preventing it.
Another corporation, which furnishes physicians and nurses free
to its employees, finds that where six years ago 75 per cent of their
time was spent in curing sickness and only 25 per cent in preventing
it, now they spend 75 per cent of their time in preventing sickness,
and only 25 per cent is needed for the cure of it. This company ap-
propriates $60,000 a year to its medical department, and out of this
budget has saved enough money in one year to procure and equip
what they call a "Rest Home," where employees below par may go
and recuperate at the expense of the company.
Other examples like these might be given. They are convincing
and conclusive. WTien business men, for the sake of increasing the
efficiency of their employees, voluntarily tax themselves for the cure
of sickness, they end by preventing it. If other business men, not as
progressive, are taxed by law for the cure of sickness, then business
ability will find abundant means of preventing sickness.
Here is the big inducement for a public-health program. Not many
corporations are big enough, not farseeing enough, to tax themselves
voluntarily, as these have done, for the support of hospitals and
sanatoria, clinics, doctors, and nurses. The overwhelming majority
of business men must depend on the public-health authorities for this
assistance. And they will not seriously look for this assistance until
they are taxed by law for the sickness that they have not prevented.
The other method of starting a health program is to start it before
there is a business demand for it. Mr. Hoffman,^ for example, says
that the "American Association for Labor Legislation could not
better serve the interests of American labor than by exerting itself
^See F. L. Hoffman, Facts and Fallades of Compulsory Health Insurance,
P- 4S.
86 TRADE UNIONISM AND LABOR PROBLEMS
effectively in behalf of the enactment and enforcement of legislation
providing more efficient governmental supervision and control of
the dusty and other trades and occupations predisposing to an ex-
cessive morbidity and mortality from pulmonary tuberculosis."
But what does the "enactment and enforcement" of such legis-
lation signify? It signifies increasing the number of petty criminals
among business men. It is rather odd that a person who is so greatly
disturbed about what he calls "paternalism" and "state socialism"
and "class legislation" and the "menace of coercive laws" should
find himself calling for laws to increase the criminality of business
men. I suppose it is not class legislation to make petty criminals
out of employers for the sake of their employees, but it is class
legislation to tax them on behalf of their employees. I suppose it is
not "paternalism" to punish your child for doing evil, but it is
paternalism to reward him for doing good. It seems to be not so
much "coercive laws" in general that our insurance experts are
against as coercive laws that do not make criminals.
We must have legislation in one way or another if we get anywhere
in a health program, and the only question is what kind of legislation
it shall be. If we go after repressive legislation which increases
criminality, we run great risks of breaking down our health depart-
ments through practical politics in the hopeless task of detecting and
prosecuting criminals ; but if we go after cooperative legislation
that offers the inducement of profit to business men if they will
take a hand themselves in preventing sickness, we shall strengthen
the demand for efficient health departments free from politics.
Instead of starting a public-health program in defiance of business
instincts, we start it by building up a business demand for it.
That America stands in need of such a program we realize now as
never before. We have had our first national survey of the people's
health. For the first time the medical profession has been organ-
ized on a national scale for the detection of disease. Thousands of
our young men, at the prime of life, when the nation needed them,
have been rejected and returned to their homes. Every local com-
munity in the nation has been wakened up to the previously un-
discovered tuberculosis and physical and mental defects in its midst.
Even our most efficient health departments did not know anything
about three fourths or even nine tenths of the tuberculosis in their
HEALTH PROGRAM 87
jurisdiction. We know now, as never before, how much it means
to the nation to start at the very beginning, before people suspect
that anything is wrong with themselves. We know that if thousands
were rejected at the draft, there must be additional thousands and
hundreds of thousands defective in like manner. The draft reached
10,000,000. But there are 100,000,000 of us.
And there we leave it. These boys of ours return to their homes,
and nothing is done about it. These hundreds of thousands need a
similar medical examination, and there are no doctors to examine
them. They are no longer immediately needed to defend the nation
in war, but they are needed in agriculture, manufactures, mining, and
every business and profession where they can help to make the
nation prosperous and happy in time of peace. Health is our first
and greatest asset ; sickness and poor physique our greatest liability.
We have abundant natural resources. We have a stimulating, even
overstimulating, climate. We have a more intense competitive busi-
ness and industry than any other nation. We need stronger men
and women to keep up the pace than any other nation. Our wealth
is not in our resources and climate, but in our oncoming men and
women. The doctor is our greatest producer of wealth. The rest of
us can do nothing if the doctor falls down. Schools and education
are fruitless without health. Industry carries an unseen but costly ex-
pense of inefficiency and absenteeism on account of ill health and poor
physique. We, as a nation, have begun to see the futility of education
and industry if we do not have health and physique to build upon.
Shall the doctor rise to this demand and do his part ? He may
cling to the old idea that his is the art of curing people of sickness and
driving out the evil that previously got into them. That is im-
portant enough,' we do not need to be told. But will he really also get
a living sense of what he might do and how he must do it if he would
make the modern scientific preventive medicine available for every-
body? He can try to bail out the river as it flows through the
country, but can he go back to the 100,000,000 unseen sources of
the river of sickness ?
I do not see that the profession as a whole is in the frame of mind
to do it. They will agree with you that it ought to be done, and,
more than any other profession or business, the medical profession
has a high sense of public responsibility. Other professions look
88 TRADE UNIONISM AND LABOR PROBLEMS
complacently on an increase in the public demand for their services.
Lawyers, on the whole, are not eager to cut down the amount of
litigation and legal business in the country. Doctors, on the other
hand, support all measures tending to improve the public health
and cut down the demand for doctors.
But, on the whole, they seem to think that the actual work of im-
proving the public health belongs to the public-health departments
and not to the practicing physicians. For that actual work re-
quires much more cooperation on, their part with the health depart-
ments than they seem to be willing to undertake. They are glad
to educate the public, and to warn tl\e public, and to approve public-
health resolutions, but to organize themselves as a profession and to
do what is necessary in order to examine 100,000,000 people and
then keep them continuously in good health does not seem to appeal
to them.
Only in one branch of the medical profession does there seem to
be a truly live appreciation of what an outsider would think is pre-
eminently needed. In that remarkable Framingham demonstration
the tuberculosis specialists have started out to examine and follow up
an entire community in advance of individual complaints. They do
it through the cooperation of the practicing physicians, and in order
to accomplish this they work through the organized medical society
and through the public-health department of the city. It means
the organization of the community itself, the organization of the
nurses, and the daily cooperation of the people, the doctors, the
nurses, the specialists, and the public-health department in a great
systematic program of early detection and sickness prevention.
This Framingham demonstration seems to me a far more impres-
sive lesson than any campaign ever undertaken by the Tuberculosis
Association for the construction of sanatoria and the cure of ad-
vanced cases. It was natural that the early tendency of tuberculosis
specialists, like other specialists, was directed towards hospitals,
sanatoria, and treatment of advanced cases. What is wanted now is
a Framingham demonstration in every state of the Union — not fewer
sanatoria but more clinics. The people of this country need to
learn how to go about it in order to cooperate with the doctors,
We never shall learn unless the phj^icians show us. We know
what we want, but we do noit know how to do it. A Framingham
HEALTH PROGRAM 89
demonstration in every state would show us how, and would waken
up the entire medical profession to the methods a»d possibilities of
sickness prevention.
Almost more than any other human ailment is tuberculosis a prob-
lem of early examination and prevention. If nearly all of us have
been carrying around the germ in little self-made pockets without
knowing it, what we want is not merely to keep away from the germ
but also to have somebody find out for us as soon as possible
whether the pockets are holding out and to tell us what to do to keep
them from breaking loose. Evidently in this search for tuberculosis
almost every other unseen human ailment can be uncovered. There
are other lurking germs, and, most of all, there is the everyday life
in the home, in the factory and shop, there is the fatigue, the strain,
the food, the shelter, that determine whether or not the body is re-
sisting and overcoming its subtle enemies. That which is done to
discover and head off tuberculosis may well discover and head off
many of the other ailments and poor physique. The tuberculosis
specialist is the least specialized of all medical specialists, for he
must take into account all of the social and industrial conditions as
well as the individual conditions that predispose to disease. In doing
so he must have the cooperation of the entire profession, of the entire
community, and of the health departments.
The great question in a health program is how to get this cooperar
tion universally. What it amounts to is practically a revised view
of the ethics of the medical profession. It seems that, in our great
cities at least, those who get the best medical attention are the very
rich and the very poor. For these extreme classes medical advice
and care are practically free. The very rich do not mind the expense,
and the very poor are not ashamed if somebody else pays their bills.
But the extreme rich and poor are scarcely 5 or 10 per cent of the
total population. The idea of extending free medicine to the other
90 per cent of the population seems revolting to many physicians.
At the University of Wisconsin we have free medical supervision
for 5000. students. The state is taxed for health supervision of the
students exactly as it is taxed for their education. As a result, the
students consult the physicians on an average probably four or five
times as often during the year as they would if they had to pay at
each consultation, besides getting the thorough physical examination
90 TRADE UNIONISM AND LABOR PROBLEMS
at the beginning of the year. The result has been a great reduction
in sickness, a reduction in absenteeism from classes, and greatly
increased student efficiency. The loss of time due to bed illness
has been reduced 40 to 60 per cent, due to the early treatment of
preventable conditions. The frequent consultations have reduced
serious illness and its complications at least 50 per cent. During the
eight years of this medical supervision the University death rate
has been reduced to only one 'fourth of the general expectant rate,
exclusive of tuberculosis, at the same age period, and even the
death rate from the recent "flu" epidemic was believed to be only
one fourth of the general death rate attributable to that cause.
Why should not something like this arrangement be extended to
the entire population of the state and the nation ? It does for 5000
of the great middle class by taxation what the very rich and the very
poor have been getting in the great cities substantially free of cost
to themselves.
The principal reason against extending it to the nation seems to be
the opposition of doctors. The idea that people generally should
consult them without paying for each consultation seems unusual to
them. Consequently we have that ethics of the profession which
permits heavy fees charged to wealthy patients in order to make up
for the free service given to indigent patients. Even if there are no
wealthy patients in the neighborhood, the doctor expects to render
a considerable amount of service free of charge, or, what is the same
thing, to carry a large account of uncollectable bills, and these
charges must be met by correspondingly higher fees charged to the
people who do pay their bills. It amounts to a tax on the wealthy
and on the great middle class in order to give free service to a pauper-
ized class or a class that is not ashamed to dodge its doctor's bills.
As a result, this great middle class of farmers, wage-earners, and
people with moderate incomes, who will not accept free service, do
not consult the doctors and pay the fees until they are compelled by
sickness. They hold off, and doctor themselves, and buy patent
medicines, until it is too late. If consultations were free, they doubt-
less would consult the doctors, as our students do, many times as
often as they now do.
This is what I call prevention of sickness, and this is what health
insurance means. It means free consultations, and it means payment
HEALTH PROGRAM 91
of the doctors, to that extent, out of a fund contributed in advance
by the people and by the industries of the country. It means free
consultations and free examinations and diagnoses supported by taxa-
tion through the medium of insurance funds. It means, instead of
the physician's being compelled to constitute himself a tax assessor
and tax collector on the wealthy and the middle class in order to
furnish the poor with free service after they are sick, that the legis-
lature shall create its own system of taxation in order that the doctor
may freely serve all persons long before they get sick.
One of the principal obstacles, as I have just said, to the method
of starting a health program by means of universal health insurance
is the attitude of many doctors. Doctors have several reasons for
suspicion. They know something about the contract doctors. They
see mutual benefit societies let out contracts to the lowest bidder to
take care of their members in sickness. But these mutual-benefit
societies have the old idea of insurance as a philanthropic measure
of relief, not the new idea of insurance as a means of preventing
sickness. They look on sickness as inevitable and the doctor as a
palliative. They get this idea largely from the doctors themselves.
They have not yet fully learned from their doctors of the enormous
advance that the past thirty years has made possible in preventive
medicine. Neither have these mutual societies the business ability
nor business inducement to prevent sickness that the employer has.
Their purpose is charity, not business. These mutual societies will
always have a most important part in a universal health program.
They do one thing that neither the doctor nor the employer can do.
The very fact that they let out contracts to the lowest bidders indi-
cates that they try to keep down expenses. They assess themselves,
and if expenses go up their assessments go up. For this reason they
are careful to watch their members and to prevent them from feigning
sickness and getting the benefits fraudulently. In this respect they
can do what neither employers nor doctors can do without their help,
and this is a reason why health-insurance programs propose greatly
to enlarge the field of these mutual societies, and to require their
members, as well as the employers, to contribute to the insurance
funds. But their field is largely the care of unprevented sickness.
Not until the business ability of the community is directed towards
prevention can we expect that the enormous advances in medical
92 TRADE UNIONISM AND LABOR PROBLEMS
science of the past thirty years will be generally utilized. Then
the doctor who bids on contracts will disappear, much as the old-
time factory inspector is giving way to the safety expert.
The other important obstacle to health insurance is the idea, not
only of insurance experts but also of the public and of physicians
and surgeons, that the work of the practicing physician is the art of
healing the sick rather than the art of preventing their sickness.
Those who are interested in the problem of tuberculosis are the
pioneers in revising this mistaken view, for they realize, as others
do not, how little can be accomplished without the complete organi-
zation of the profession and of the community for the purpose of
discovery and prevention. It is fortunate that they have had their
own association and their own funds, independent of the profession in
general, for it is this that enables them to go ahead in their educa-
tional campaign of organization, legislation, and prevention, without
waiting for others.
The work of the Tuberculosis Association reveals that palliatives
and halfway measures are inadequate. It reveals to us, most of all,
the need of a medical profession that shall be in truth the guardian
of the public health as well as practitioners of the healing art —
a profession so organized that the wonderful developments of medical
science shall reach every person, for the public health is nothing but
the protection of each individual's health.
It reveals to us the need of placing this profession on a business
basis instead of leaving its practitioners to the doubtful expedient
of financing their calls for charity by taxing it up to the more well-
to-do.
The work of the Tuberculosis Association reveals the need of en-
listing the business ability of the nation in the campaign of preven-
tion. Industry already pays an unseen tax in the absenteeism and
inefficiency caused by sickness and poor physique. But not until
this tax is made visible in terms of money, where it can be actually
seen entering into the cost of manufacture, will business men gen-
erally look to the medical profession for assistance in reducing it.
When the vigilance of business men is enlisted in the cause, then
will the high aims of the new medical profession, which seeks to
keep the nation healthy as well as cure its sickness, be more nearly
realized. Medicine will more nearly become public medicine, but
HEALTH PROGRAM 93
liberated from politics. Health departments, in every town and rural
district, instead of trying to do the work of prevention themselves
unaided, will be the public agencies which furnish to the private
practitioners the dispensaries, clinics, hospitals, sanatoria, school and
county nurses, which make it financially possible for the private
practitioners to add the work of prevention to their work of healing.
, A truly comprehensive health program is not restricted to any one
thing. It means, of course, the cure of sickness. But it means, also,
the personal cooperation of every private citizen in sickness preven-
tion. It means the business enterprise of every capitalist and em-
ployer of labor. It means sickness insurance. It means increased
taxation on unprevented sickness, with ultimately reduced taxation
on property. It means, most of all, a medical profession able and
willing to bring to the service of the entire nation the marvelous
discoveries of the science of preventive medicine.
John R. Commons
University of Wisconsin
PART II. THE LABOR MARKET
VII
AUTOBIOGRAPHIES OF FLOATING LABORERS^
NUMBER 2. Age fifty-six years, born in America, of American
parents. Single. Still strong. When he was between twenty and
twenty-five years of age he wanted to marry, but never had enough
money to establish a home. He became a " regular " lumberjack. A
"regular" lumberjack cannot marry, for he cannot take his wife to
the camp, and it is of no use for her to live in the city. Secondly,
if a man becomes a "regular" lumberjack, he is not fit for married
life; he drinks, fights, and leads an immoral life. He does not
know any trade. While a boy he wanted to learn mechanics, to
become a worker in a machine shop, but he had no chance for this,
for his folks were poor and he did not have a sense of how to go
about learning this desired trade ; his father was not very bright
either — he could not read and write. He himself had been in a
public school for his education.
His father was a farmer, and he started to work on his father's
farm when ten years of age, to do chores and every kind of farming
work. His mother died when he was very young. As the farm was
heavily mortgaged, it was sold ; not much money was left.
When he was sixteen years of age he went into the lumber woods
to provide for himself. He worked from fourteen to fifteen hours
a day. The pay was, at the beginning, .$i8 a month and board.
Laundry was done by the men themselves. Two men slept in a
bunk; the bunks were in two stories. The bedding was hemlock
brush, covered with a blanket. In the bunk house there was no
iron stove, but just a fireplace called "kabuke." The foreman was
a bad man, always hollering, abusing, ever dissatisfied with his men,
and turning them out two hours before "they could see wolves."
iFrom interviews made for the U.S. Industrial Relations Commission, 1914.
94
FLOATING LABORERS 95
The plates and table utensils were made of wood by the men them-
selves. The board was very poor; it consisted mostly of salt
pork and salt beef. There was no ventilation in the bunk houses.
There was no wooden floor, just the naked earth. Nobody washed
the blankets ; they were dirty and had vermin.
He managed to work on this place eight years, in winter and in
summer. The company then moved to another place, where he
worked a year more with the same company. He then wanted to try
other companies, believing that they might be better, but the con-
ditions were almost the same, perhaps a little better. He worked
here and there one year. He quit because other fellows told him of
a place where the conditions were much better. He tried that place,
but the conditions were just the same. He then migrated to the state
of Wisconsin, and worked there in various lumber camps two years,
but the labor conditions in the lumber camps in Wisconsin were worse
than in Michigan. He wanted to see the camps in Minnesota, and
migrated there. He worked there five years with two companies.
In the camp of one the labor conditions were a little better than in
the lumber camps of Wisconsin, but in the camp of the other the
conditions were still worse.
He then wanted to see his folks, father and sister, and came back
to Michigan, having about $60. After a week with his folks he went
to work for a lumber jobber, thirteen to fourteen hours a day, $35
a month and board. He paid for the washing of his laundry 80 cents
a month. Two men slept in one bunk ; the bunks were in two and
three stories. The bedding consisted of sacks filled with hay and
straw, and blankets, which were never washed and were full of
vermin. The bunk house was overcrowded. The air in the night was
very bad ; he felt dizzy and had a bad taste in his mouth in the
morning. There were no spittoons, no privy vaults ; the men were
often sick, catching cold and grippe. The drinking water was bad,
just surface or swamp water. He felt quite tired in the evening.
He worked at this place about five months. He had only from $12
to $15 left. He then went to work with a company, from eleven to
twelve hours a day, the pay being $35 a month and board. His
work consisted in driving oxen. Two men slept in one bunk ; the
bunks were in two stories ; the floor was dirty ; the bedding con-
sisted of loose straw covered with a blanket. The drinking was good
96 TRADE UNIONISM AND LABOR PROBLEMS
— spring water. The foreman was a good man. The goods in the
commissary store were the same as elsewhere, but the price was from
IS to so per cent higher than in the stores in town.
A year ago he worked in the lumber camp of & Co. from
eleven and one-half to twelve hours a day. The pay was $32 a
month and board. Two men slept in one bunk ; the bunks were in
three stories. The bunk house was overcrowded; about 125 to 140
men slept in the same bunk house. The floor was dirty ; it was diffi-
cult to get through the mud. The bedding consisted of straw and hay
on boards; there were "bedbugs and lice"; although washed, the
bedding could not be kept clean, because dirty men were going and
coming. The board was very good, and the water was good, but the
foreman was always speeding up and swearing with every word he
said. Could not stand this job any longer than two and one-half
days. From that place he came to the present camp.
They work here eleven hours a day, and his pay is $32 a month
and board. His work consists of driving oxen. He can work con-
tinuously only two or three weeks ; then he gets his pay, goes to the
town of P , drinks, fights, "just having a good time." Lately he
has been working four weeks, and feels a need of "rest." He has
not been out of work because he could not secure it; he can se-
cure work any time. He has never stolen anything, never begged
nor applied for charity ; but what he has done is heavy drinking
(whisky) , prostitution, and fighting. He has a gash on his face, and
half of his nose was bitten off in a saloon fight many years ago.
He has had three accidents in the lumber work: first, he had his
hand broken; second, his leg was broken; and the third time his
left shoulder was hurt. These accidents occurred by skidding. He
is a "regular" lumberjack, because he makes his living by working
in the lumber industry, drinks, fights, and lives in the way in which
a lumberjack does.
He thinks that the worst evil in the lumber camps is the bunk
houses. They ought to be built similar to hotels. Every man ought
to have his own small room, and the board should be provided as in
city boarding houses. This would not cost much more for the com-
pany than a camp costs now. The company gives enough to eat and
the meals are prepared properly, but they serve the same meals day
in and day out, week in and week out, at all times. After a time a
FLOATING LABORERS 97
man becomes tired, from the sameness of the meals. The camps
are nowadays more or less permanent, because the railroad is
bringing logs in and carrying the men to working places at great
distances.
To the question as to what the government must do in order to
better the conditions of the life of lumberjacks, he answered : " Close
all saloons, and wipe out all the prostitute houses ; if this were done,
the lumberjacks would take pretty good care of themselves as to
bettering the labor conditions in the camps."
Jungle, Redfern, South Dakota
Number 3. Age twenty-four years, Dane. Seven years in this
country. Came to America because it is the best country in the
world. The best opportunities to better himself.
Latin (high-school) education. Started out as a sailor. Learned
steam engineering. Quit it because of the hardships and monotony
in the life of a sailor. Pay was from $15 to $20 a month. Worked
in various industries in America. Had a job in the shipyard at
Philadelphia, $2 a day, ten hours; treatment first class. Quit.
Started to go sailing on the Great Lakes — higher wages, more op-
portunity of saving money. Could not get job because of the sailors'
union ; entrance fees $25; he had not the money. A job in factory
— one day ; conditions bad. Secured a job in a rubber works ; $1.50,
afterwards $1.75 ; ten hours a day. Laid off because of the business
depression. Went out to a farm to pick potatoes at $1 a day, ten
hours ; the board was good. Returned to the East. No work for
four or five months. Got money from home, about $200 — money
he had saved. Went back to Buffalo ; paid his way. Was told that
a steel plant was to be opened there. Did not get work there —
because nearly all men taken were south European immigrants.
Wanted to enter the union. The union did not let him in, because
too many old members were around out of work. The Lake Car-
riers' Association declared open shop. Got a job from this Asso-
ciation. It was necessary to sign a statement declaring loyalty to
Association or to union. He signed the union oath, after which he
was fired. Started for the West. Believed that the West was
better. Went broke in Chicago. Went into restaurant asking for
dish-washing. Did not get work, but got meals. Went to Santa Fe.
98 TRADE UNIONISM AND LABOR PROBLEMS
Beat his way down to Missouri. Went over the country roads not
very far from Kansas City. Avoided the city because of the fear of
getting arrested for vagrancy. Asked farmers for job. Begged. Got
one job at 50 cents a day for five days, when the job was done. After
buying some clothing, 25 cents left. Bought a loaf of bread, ice
cream — all money gone. Went into Nebraska — westward. Several
days without eating, except apples. Got a job with a German farmer,
haymaking, $1.50 a day, ten to eleven hours. Good board, slept in
the barn. Treatment was fine. Six days, the job was done. Partner
got hurt very badly, trying to get a freight train, and was sent home
East. Continued his way toward West. Freighted. Got a job on
a farm in Nebraska, $18 a month. Chores and general farm work,
ten hours. Board good. Got hurt after three months. Right foot
was hurt by mowing machine. Two weeks ill. Doctor's bill, $15.
Paid it himself. Was young, no company for him, the life was too
monotonous on the farm. Working all the time in the fields, wages
low, hours long. Quit, although the farmer promised $30 a month ;
he could buy calves and pasture them, free of charge, and market
them for his own benefit. Perhaps this was a little opportunity for
him, but for the reasons stated he left. Went to Denver — westward.
Two weeks. Looked for jobs through private employment agencies.
Paid for fees $1.50. Was shipped to Moffat Road; in railway con-
struction camp ; $2 a day, or 20 cents an hour, ten hours ; two days.
Quit. Got work in a coal mine. Outside night work ; $2 .2 5, nine
hours. Mine camp, four or six men slept in each room, two in a
bed; dirty mattress, dirty blankets. Lousy. No ventilation, no
spittoons. No sanitary rules; no garbage collections. No toilet.
One week. Left because of snowstorm. Went westward, beat his way
to Salt Lake City. Broke. Two days in Salt Lake City. Asked a
fellow in the street where a man without money could get a bed.
Slept in a saloon. Begged. Sold his razor. Was shipped out with
800 men to the Western Pacific construction camp in Nevada. On
the road two days and two nights without meals. Some fellows
ate raw potatoes picked up. Were taken to the end of the new track.
Box cars, some with provisions. The men stormed the cars with
provisions and took cheese, bread, and a few canned stuffs. He got
several cans. Hiked twenty miles into the desert. Wanted to go to
the Southern Pacific. Took a train down the line. Got a job on a
FLOATING LABORERS 99
construction camp on Western Pacific, $1.75 a day, ten hours. The
board was poor. It was a slave-driving job ; lousy bunks in tents ;
twelve days ; quit. Went south into another camp, conditions were
slightly better, $2 a day, better work. Quit. Got sick from cold.
No medical aid. Went to California, to San Francisco ; 50 cents in
pocket; three weeks. Was on Barbary Coast. Hung around the
red-light district. Down-and-outs hang around there, for the "sports"
(rich people) come there, spend money lavishly. He did begging.
Entered a mission called "Whosoever Will." He wanted to have a
Christmas breakfast, promised by the mission. About 2000 people
had gathered, the street was full ; a riot almost occurred. The hungry
people were waiting for that breakfast the whole night. He got in-
side. Got for breakfast rotten fish, could not eat it ; two slices bread
and coffee — bread was all right. The mission wanted the men to
come for dinner, for parading through the streets. He refused, his
self-respect was against it. (The men conducting the "Holy Mis-
sion" had made $300,000 out of these poor people through their
work, donations, and any kind of manipulation. The mission crooks
were afterwards arrested. )
He left for the South to pick oranges ; put to work by police on
street cleaning in a small town. Worked a day, then told to get out
of town. No trial. Went to Los Angeles. A job for the city, pick
and shovel, $2.25 a day, eight hours. Worked five months. Quit —
too hot. Went sailing. One year sailing. Got sick. Thought he
had consumption, but had only cold. Went to Portland, Oregon.
Went to work in Columbia Digger Company, $50 a month. Board
and room were good. Worked eight months as second engineer.
No more work. Laid off in the winter time. $125 saved. Went to
Los Angeles.
Joined I. W. W. in Portland. In Los Angeles was elected secretary
of this organization, but did not get any pay.
Took part in the Madero Revolution in Mexico. Three months on
the battle ground. The command had about 200 men ; about half
were Americans. It had control over several towns. He did shoot-
ing. He is sure he killed one Federal. Was elected financial secre-
tary of a town. No pay. Was handed about $1900. Bought
ammunition. Had machine guns made in Los Angeles. Their com-
mand got defeated by Federals who had 1500 men. The command
100 TRADE UNIONISM AND LABOR PROBLEMS .
in which he was fighting lost three or four men. Retreated to the
United States, surrendered to the United States troops. He beat his
way across the line. Went to Los Angeles. Was hidden there for a
time. Went to San Pedro. Got a steam schooner. Went to San
Francisco. Then to Portland. Had little money, about $io. Could
steal in Mexico — big money, but did not, the money belonged to
his fellow workers. Went to work right away in Portland for the
same company as before. Conditions the same. Worked there six
months. Job done in winter ; $150 saved. All winter there in Port-
land. Got a job of dish-washing, $8 a week and meals, twelve hours,
two weeks. Quit — too long hours, not enough money ; out of work
two months. Got a secret disease.
In 19 13 went to a lumber camp near Seattle, Washington, to drive
donkeys, $3.25. Board good. Slept in bunks. One-man bunks in
two-layer tiers. Bedding straw, own blankets, vermin. No laundry,
washing, bathing, toilet facilities ; no screens, no sanitary rules.
Worked eleven hours ; had one and one-half miles to hike out to the
work-place each day. Got up about five o'clock; stopped at five
forty-five at night. Worked two weeks. Quit. Long hours. Bad
conditions. Went to Portland to work for the same company. Later
he worked on a boat of the same company. Joined the new Long-
shoremen's Union. This fought another union but lost out. Went
to work for the Columbia Digger Company. Conditions the same.
Work the same. Worked to the first of January, 1914. Got laid
off. No work. Took a contract to chop cordwood, 500 cords, $1 a
cord. Spent all his money for tools and provisions and shipment
out to the place — spent about $100. When he, with his partner,
got there, they discovered they were cheated by a crooked contractor.
No work.
Returned to Portland. Was broke. Partner got $10 from his
father. Took another contract to clear land, two acres, $50 an acre ;
and to cut 100 cords of wood, $1 a cord ; got cheated also ; the land
was harder to clear than the owner told. It rained and snowed also.
Left. Did not earn a cent during one and one-half months of work.
Were broke, absolutely— provisions all gone, the farmer did not even
take their tools to the depot, because he had not time ; he really
wanted to have their tools. Got another job on a farm, 20 cents an
hour to clear land ; got potatoes, apples, and milk free. Made about
FLOATING LABORERS ? loj
$10. Work done. Went to Portland. Beat his'way to Seattle.
Nothing doing in the woods. In Seattle about a week. Stayed with
a friend. Went back to -Portland, beat it. Broke. Stayed down on
the dredge, even slept there. Went hungry. Went to work for that
company — again $60 a month and own board. Worked until the
latter part of May. No work. Laid off. Got another job for another
company as a deck hand, $45 a month ; good board ; too long hours,
— fourteen to fifteen hours, sometimes only four hours for sleeping ;
slept in the "dog hole." Worked twenty days. Quit — could not
stand it. Went to Seattle, June 2 1 ; no work in Seattle. Started for
harvest in Montana, beating his way. Got ditched lots of times.
Paid to carmen, for the tips, from 25 to 50 cents every time. He
had some money, bought some stuff. Made tramp "mulligan" in
jungles. No jobs in Montana. Thousands of idle men there; you
could not even buy a job there. Came to Aberdeen, then to Redfield ;
ten days here, out of work. Had money for first two or three days.
Now about seven days broke. Begging of farmers, asking for work ;
these give meals anyhow. Sleeps in box. cars and haystacks.
Immediate plans : to work here in the harvest fields, then in North
Dakota, then elsewhere to save money, to go home to his mother in
Denmark, and to stay there more or less permanently.
In Los Angeles lived with a girl for four months as married
people; she got $5 in a department store; he got $13.50 a week.
The best time he ever had in this country. Loved each other. Could
not marry. Wages were low; were afraid.
The number of casual laborers is growing in this country. More
men are falling into the ranks of down-and-outs than in previous
years. Criticizes American Federation of Labor — the form of or-
ganization is out of date ; most of the leaders are controlled by big
employers. Criticizes socialists. They have turned from economic
struggle to politics. The socialists are politicians for themselves.
In fact they have traded the interests of the working people for the
interests of the petit bourgeois.
COMMENTS
He is the leader and spokesman of the I. W. W. people and also
the harvest hands (about 500) in Redfield. He is quite an intelli-
gent boy, but all signs show that he is going downward. If he
102 TRADE UNIONISM AND LABOR PROBLEMS
continues to migrate he may become a hobo and afterwards a tramp
of the common type. In the jungle of the harvest hands he addressed
the crowd. All the men, with a few exceptions, expressed approval
of the sentiments of the speech when he called for a show of hands.
He did not mention the I.W.W. nor wear an I.W.W. button, and
he claimed in private conversation with me that he was not a
member. He says that it's too hard to keep up the 50 cents per
month dues. Notes taken on his speech are as follows :
The great things that need to be done are to reduce the hours of
labor and increase the wages. If the hours of labor are reduced from
twelve or ten to eight, more men will be employed and there will be
less unemployment. If the hours of labor are reduced enough there
will be work for everybody.
You men have got to stand on your own feet and help yourselves.
Nobody else will help you — neither Jesus Christ nor anyone else
sitting up in the clouds above you can do anything for you. Legis-
lation is bound to fail. What good does the minimum wage law do
you? The courts won't stand for such a law being applied to men.
Workmen's compensation laws are frauds. If a man gets hurt, what
does he get? Only half or two thirds of his wages and that at a time
when his expenses are greater than usual. We are not interested in
old-age pensions, because we don't live long enough to get old.
Labor exchanges won't help much. I've been in England where they
have them and where they have old-age pensions, but I never saw
such poverty anywhere as I saw in England. We have child labor
laws in this country, but they are not enforced. The trouble at
Lawrence showed that. Many good bills are introduced by well-
meaning men, but before they become law, if they become law at all,
they are twisted all out of shape by the pressure from special in-
terests. President Wilson is a good man. I voted for him myself.
But what can he do? You men can trust no one but your own
leaders, and even your own leaders sell you out sometimes.
We have no interest or hope in political action. Most of us are
disfranchised, because we can't stay long enough in one place to get
a vote. We have to keep moving to find work. We don't bum our
way on the railroads, sleep and eat in the jungles, and wear poor,
dirty clothes because we like to do it. We do it because we can't
help ourselves. Our only salvation is organization— one big organi-
zation of all workers. When we get that we can take the industries
we work in and give work to everybody. Ownership does not amount
to anything then. But this can't all be done in a day. It will have
to be done gradually and you men will have to do it.
FLOATING LABORERS 103
"Industrial unrest?" If a man is treated like a dog he's a fool if
he don't bark, ain't he? People accuse us of advocating violence.
We don't believe in violence except for self-protection. All societies
protect themselves against the unsocial acts of individuals. Men
are hanged for murder, for example. So we believe that we have the
moral right to prevent a man from working for $2.50 a day when
we are fighting for $3.
P. W. Speek
VIII
THE MEN WE LODGE^
I. WHO THEY ARE
TO THE citizens of New York City the homeless man needs no
introduction. According to a census made by the New York
City Police Department for the United States Bureau of Labor Sta-
tistics on the night of January 30, 1915, he was here some 26,000
strong, spending the night in the Municipal Lodging House, at the
Farm Colony of the Department of Public Charities, at the Ellis
Island Immigration Station, in immigrant homes, in cheap lodging
houses, in employment agencies, in missions, in the rear rooms of
saloons, in bread lines, and on public thoroughfares. No observing
person has walked through our down-town parks, through the Bow-
ery or similar streets, without having at least a passing acquaintance
with him.
Withdrawn from the activities and responsibilities of a normal
family life, he is not unlike many men who, living in hotels, dubs,
and boarding houses, might in the strict sense of the word be called
homeless. From these he differs, however, in that his loneliness
is often accompanied either by unemployment or by a complexity of
disabilities which make him unemployable. He is not only home-
less but is often without food, shelter, or money, and in most cases,
if a worker at all, he is a casual laborer.
To the citizens who come into closer contact with the homeless
man than is afforded in a walk through the Bowery or Union
Square, such a description as the foregoing, however, proves inade-
quate and misleading. An investigation of some 2000 men whom
New York City lodged at the Municipal Lodging House in March,
1 9 14, indicated that there is no one type of homelessness, and that
iProm Report to the Advisory Social Service Committee of the Municipal
Lodging House, New York, September, 1915, pp. 9-22.
104
THE MEN WE LODGE 10$
no two homeless people are alike. Each one is unique in himself :
the product of a different inheritance, different environments, and
difierent experiences; the possessor of a different disposition, dif-
ferent capabilities, different habits, different disabilities, and different
needs.
The men we lodge at the Municipal Lodging House are as widely
different as the transient guests of any New York City hotel. They
are as different as the caiises which have taken them away from the
normal life of society. There are old men over seventy, young
runaway boys, orphans, and men who should be in the prime of life.
There are strong men, crippled men, blind men, and diseased men
in urgent need of hospital care. There are casual laborers who have
been idle less than one week, men who have failed in their business
or profession, and vagrants who frankly avoid work. There are
men who have spent their lives in New York City, and nonresidents
and aliens with no legal claim on the city's charity. There are tem-
perate men, habitual drug-users, and inebriates ; men who are nor-
mally minded, and men who are mentally defective. There are
professional beggars and men who hold the beggar in contempt.
There are white men and colored men ; single men, married men in
search of work, and family deserters ; Catholics, Protestants, and
Hebrews. There is as wide a divergency among homeless men as
there is among the rest of mankind.
II. THEIR CONDITIONS
Given the best will in the world, no effort to deal with homeless-
ness can go very far without facts. When men gather cold and
hungry and ragged in a long line outside the Municipal Lodging
House, no one can tell offhand by looking at them why they are
down and out, or how they can be helped in self-respecting fashion
back to the normal life of society.
We need not, however, begin in absolute ignorance, thanks to a
very important investigation made at the Municipal Lodging House
in March, 1914, under the direction of the Commissioner of Public
Charities. Fifteen hundred men were studied at that time by a
staff of fifteen investigators. At the same time a medical examina-
tion of 2000 men was conducted by fifteen medical examiners. This
io6 TRADE UNIONISM AND LABOR PROBLEMS
investigation represented the first large attempt in America to find
out about the men who take refuge in a municipal lodging house.
The facts brought out by this investigation and by others recently
made in New York City show that the men who frequent the
Lodging House can be classified roughly into two distinct though con-
stantly merging groups ; namely, the unemployed and the unem-
ployable. There has been no adequate method perfected for the
separation of unemployable individuals from the body of the un-
employed which would make possible any sharp classification.
Out of 1426 men who answered the inquiry regarding the length
of time they had been unemployed, only 6, or one half of i per'
cent, claimed to be working. All but one tenth of the total, 1274
men, had been unemployed over one week ; and 924, practically
two thirds, had been out of work for over a month. One hundred
and two of the men had been idle over six months.
These figures, of course, refer only to the length of time the
men had been idle prior to their investigation in March, 1914. They
do not indicate how long the men had been previously employed
or how frequent had been the periods of their past unemployment.
It should be pointed out, moreover, that this inquiry preceded the
more abnormal period of unemployment in the winter of 1914-1915.
The reasons given by the applicants for coming to New York
City were tabulated only in the case of those who had been here for
six months or less. Out of 417 of these, 306, a large majority,
claimed to have come to this city in search of work. While it is
necessary to make allowance for probable inaccuracies in many of
these claims, they undoubtedly indicate conditions of honest unem-
ployment in the case of a substantial number of men who frequent
the Municipal Lodging House yearly.
This conclusion was substantiated by letters received from past
employers of many of the men. These letters point out that, in a
number of cases, the unemployment of men was due neither to their
inability to hold a job nor to their unwillingness to work, but simply
to the fact that they could not find work.
The following extracts are illustrative:
(i) A chemical manufacturer : "P. F. employed here as a pol-
isher and washer. Work satisfactory. Services not required after
busy season."
THE MEN WE LODGE 107
(2) An automobile dealer: "J. I. was honest, reliable, and effi-
cient. He left here on account of the slackness of business. Would
reemploy him in our busy season."
'(3) A building contractor: "J. L. left because our work was
completed. We expect to resume work about March 25 and might
be able to reemploy him then."
(4) A bridge contractor: "C. S. left because of the comple-
tion of work. We would reemploy him if conditions were favorable."
(5) The manager of a skirt company: "We would reemploy
J. M. if work were not so slow."
(6) A teaming contractor: "G. K. left my employ because of
the scarcity of work. Scarcity of labor in this country has put many
a good man on the road without money or food."
These letters bear out a fact that is now well recognized. A
United States Census Report of 1910 showed that in the preceding
year a total of 117,806 more persons were employed in the manufac-
turing industries of New York State in January than in October.
Such fluctuations in the demand for labor are not confined to one
industry or to one season ; and occasionally, as in the winter of
19 14-19 15, they demoralize the entire labor market. Unfortunately,
the casual laborer — who all too frequently becomes also the home-
less man — is made to bear the brunt of these fluctuations.
Of the 2000 men who were given a medical examination, 1774,
approximately 9 out of every 10, were, according to the adjudg-
ments of the examining physicians, physically able to work. Twelve
hundred and forty-seven, or 62 per cent of the total, were con-
sidered physically able to do regular hard manual labor ; 354, or 18
per cent, to do medium hard work; and 173, or 9 per cent, to do
light work only. Two hundred and twenty-six, i out of every 10,
were adjudged physically unable to work.^
The results of this investigation show, moreover, that a substan-
tial proportion of the men who apply at the Municipal Lodging
House are unemployable — men whose unenviable lot it is to be the
less fit in the struggle for survival. Many homeless men, though
willing and anxious to work, are chronically unemployed because
they are too inefficient to hold a job even under normal indus-
trial conditions. More efficient than these, yet less efficient than
1 These 226 men do not, however, include all of the unemployables found
within this group.
io8 TRADE UNIONISM AND LABOR PROBLEMS
normal workers, are many others, frequently unemployed because
they are the first to be dropped from the pay roll when work
becomes "slack." Many others, moreover, are unemployable be-
cause, being neither anxious nor willing to work, they frankly avoid
employment.
The factors behind the inefficiency of a man have usually im-
bedded themselves so far 4nto his past that a clean-cut dissection
of them is practically impossible. No such experiment was attempted
in this Municipal Lodging House investigation. Certain conspicuous
factors, however, were frequently found contributing to the inef-
ficiency of the men investigated. These fall naturally around six
distinct though constantly merging groups of inefficient homeless
men. They are (i) the physically handicapped, (2) the mentally
handicapped, (3) the inebriate, (4) the habitually idle, (5) the
untrained, and (6) the aged.
Of the 2000 men who were examined by the physicians, 226,
or 1 1 per cent, were adjudged physically unable to work ; 80, or
4 per cent, were temporarily disabled, and 146, or 7 per cent, were
permanently disabled. Fifty-nine of the 2000 men had disabilities
which demanded hospital treatment, and 239 of them were recom-
mended for dispensary treatment. The leading factor physically in-
capacitating men for work was tuberculosis ; others were senility,
nephritis, heart disease, acute pleurisy, and blindness.
That a number of the homeless men included in this investigation
were mentally defective and in that respect unemployable is evi-
dent from a study of the records of some 200 who were examined
by the Clearing House for Mental Defectives. The following ex-
tracts from the records of some of these men are illustrative :
No. 90. A laborer, age twenty-four, had spent his life in New
York City. "Patient presents a very simple, foolish attitude; he
has no judgment, does not reason, and has absolutely no purpose in
life. He does not care to work but begs and bums his way. He
has no friends and is a recluse. He is mentally defective." He had
served a six months' sentence on Blackwell's Island for vagrancy.
No. 1152. A laborer, age fifty, had been in the United States
twenty-five years and in New York City fifteen years. He was
diagnosed as an imbecile. He had never held a job for over six
months, working only long enough to get money with which to
become intoxicated.
THE MEN WE LODGE 109
Of 1482 men who made statements regarding their habits, 1292
— approximately 9 out of every 10 — said that they drank alco-
holic liquors. Six hundred and fifty-seven, or 44 per cent, said
that they drank excessively; 635, or 43 per cent, said that they
drank moderately; and 190, or 13 per cent, claimed to be total
abstainers.
Of the 2000 men who were given a medical examination, 775,
or 39 per cent, were diagnosed as suffering from alcoholism. Ac-
cording to Dr. James Alexander Miller, these "figures probably do
not represent by any means the number of individuals who were
alcoholic . .-. but are rather indicative only of the number who
manifested acute evidence of that condition at the time of the investi-
gation." Not infrequently were responses from past employers of
these men such as are here quoted :
"His failing was drink. I would not employ him again."
"He used intoxicating liquor to such an extent as to hinder his
work."
"Drink interfered with his work. If he could keep away from
liquor, he would be O. K."
"Discharged for drunkenness."
Of the 102 men who had been unemployed over six months, 50—
approximately i out of every 2 — had been idle one year or over.
The means by which they lived is indicated in the answers of 1482
of the men investigated. Of this number, 317^ — i out of every 5 • —
admitted that they begged either occasionally or regularly.
Some of these men had degenerated through repeated periods of
idleness into a voluntary state of unproductiveness and parasitism.
Others were unemployed, apparently, because they had never dis-
ciplined themselves to obey orders. Others, moreover, were unable to
keep their minds on their work, either because they were obsessed
with an idea that they were more fit for something else, perhaps in a
different city or state, or because some misfortune, such as the loss of
a friend, had left them without the initiative and the purpose which
had made their work worth while.
Given a well-stocked market of unskilled laborers, the less fit —
those handicapped by some physical or mental defect— are, obviously,
forced either to look to other sources than to unskilled labor for
their livelihood or to become dependent. Unfortunately they are
no TRADE UNIONISM AND LABOR PROBLEMS
all too often forced to choose the latter alternative, because they lack
the training required for positions which they might otherwise ca-
pably fill. The records of this investigation show that a number of the
men interviewed could have been self-supporting if they had been
trained in some occupation which they were physically and mentally
able to carry on. Such statements as the following were not in-
frequently received from past employers of these men :
" Get suitable work for him."
" Might be all right in the right place."
"He should have better education in the trade."
Even in a Utopian society one might expect to find a certain
number of old people among the unemployable. Although most of
the men included in this investigation had left the ranks of industry
for causes other than old age, the examining physicians found se-
nility, next to tuberculosis, to be the largest single factor leading to
permanent physical disability. Out of 146 permanently disabled men,
14 — I out of every 10 — were unable to work on account of old age..
It was found, moreover, that of 1467 men who gave their ages,
lis — I out of every 13 — were sixty years of age or over. Eleven
of the men were seventy or over.
Physical disability, retarded mentality, inebriety, habitual idle-
ness, lack of training, and old age, — these are some of the factors
frequently found contributing to the inefficiency of. these men.
Perhaps in no single instance does any one of them appear alone.
In many, several are found in various combinations. With the
exception of old age, each of these factors augments and is aug-
mented by the others, and all of them contribute jointly to the
production of a group of dependents, more or less unemployable,
who are the city's recurrent guests at the Municipal Lodging House.
This investigation, moreover, revealed the fact that among the
lodgers at the Municipal Lodging House were many men who had
no legal claim upon the city's hospitality. According to the state
charities law, at least one year in residence is required before a
person can become a legal resident of New York City, which alone
would make him a bona fide legal claimant of the city's charity.
Of the 1429 men who stated the time they had been in New York
City, 588 — 2 out of every 5 — had not been here over one year,
THE MEN WE LODGE ill
while 322 — I out of every 5 — had not been here over two months.
One tenth, or 141, of the men had not been here over ten days.
Some of these men were residents of other counties and states;
some were ahens, and some were runaway boys.
Of the 1448 men who stated their birthplace, 621, or 43 per
cent, were foreign bom. Thirty-six of these men had not been in
the United States over one year, and 74 had not been here over three
years. There were, moreover, 304 applicants at the Municipal
Lodging House in March, 19 14, who were rejected from this investi-
gation because they could not speak English. Had these men been
included, these numbers would have been much larger.
The federal government has the power of removal of an alien
improperly admitted to the United States, but this power ceases
after he has been in this country three years. The law of New
York, however, gives the State Board of Charities unlimited author-
ity for the removal of alien and nonresident poor. The law reads :
The State Board of Charities, and any of its members or offi-
cers, may, at any time, visit and inspect any institution subject to
its supervision to ascertain if any inmates supported therein at a
state, county or municipal expense are state charges, non-residents
or alien poor ; and it may cause to be removed to the state or country
from which he came any such non-resident or alien poor found in
any such institution. (State charities law, constituting Chapter 55
of the Consolidated Laws, Section 17.)
According to the secretary of the State Board of Charities, how-
ever, it is the policy of that body to return nonresident and alien-poor
inmates of the Municipal Lodging House only in very exceptional
cases. "In the first place," the secretary states, "the board doubts
the wisdom of returning them generally, and in the second place it
dees not have an appropriation sufficient for the purpose."
Following are extracts from the records of some of the nonresi-
dent and alien applicants among the men investigated at the Munici-
pal Lodging House in March, 19 14, who were subject to removal
from the state under the law :
No. gg2. An English seaman, age sixty-three, had been in the
United States and in New York City eight weeks, during which
time he had been idle. He had been discharged from a ship while
in this port because of a broken thigh.
112 TRADE UNIONISM AND LABOR PROBLEMS
No. 1258. A resident of Massachusetts, age twenty-seven, had
been in New York City five weeks. Except for a few jobs at snow-
shovehng, he had been idle during this entire time. His brother
wrote that the man had a home in Massachusetts.
No. 1337. A resident of Pennsylvania, age twenty-three, had
been in New York City one day. In that state he had been an
inmate of a penal institution for one year. A past employer wrote
that he thought the man was mentally defective. His father wrote,
" I hope he will soon return home."
No. 1377. A German candy-maker, age twenty-seven, had been
in the United States and in New York City two years. He had
been at the Municipal Lodging House ten times in January, 1914,
and had served a thirty-day sentence at the workhouse.
Of the 1467 applicants giving their ages, 26 were boys under
nineteen years of age, and 48 were under twenty-one. Eleven of
these boys were foreign born ; 16 were native born of foreign parent-
age; and 20 were native born of native parentage. That a number
of them had run away from their homes was shown by their own
statements and by letters from their friends and relatives.
No. 335. An American boy, age nineteen, came to New York
City " to see the town " two months prior to his application at the
Municipal Lodging House. His father wrote from New Orleans
that the boy had run away from a good home there. He asked to
have the boy returned.
No. 363. A New York City boy, age nineteen, had run away
from his grandfather's home in the Bronx. The grandparent wrote
that he had given the boy a good home, but that he had run away.
No. 1071. An American boy, age seventeen, had "bummed" his
way to New York City four days prior to his application at the
Municipal Lodging House. He had run away from his aunt's home
in Washington, D. C, to visit a sister in New York, whose address
he did not know. His aunt wrote, "Send him to me at once."
III. THEIR NEEDS
The need for food and shelter is practically the only one com-
mon to all of the men who apply at the Municipal Lodging House.
It is a need, fortunately, which the city can meet en masse by the
provision of so many beds, so many loaves of bread, so much soup,
so many cups of coffee, so many bowls of cereal, so much milk, so
much sugar, a building for the housing of these supplies, and a
force of employees for their administration.
THE MEN WE LODGE 113
But have the needs of the lodgers been met when they have been
fed and given a night's lodging ? Is this common need the greatest
need presented by all or by any one of them ? Obviously it is not.
They need food and shelter because they lack the means of self-
maintenance. They lack the means of self-maintenance either be-
cause they cannot find a job or because they are handicapped by
physical and mental abnormality, by inebriety, habitual idleness,
lack of training, or old age and are therefore unable to hold a job
when they find one.
From the facts brought out in these investigations, it is obvious
that any constructive program for meeting the needs presented by
the homeless must be directed toward all of their disabilities. The
whole man must be treated, not merely his appetite and his desire
for sleep.
Food and shelter may be the individual's greatest need. In
most cases, undoubtedly, it is not. It is but a symptom of another
need — the need of a job, or the need of constructive treatment for
those disabilities which keep him from a job.
Every man who applies for food and shelter at the Municipal
Lodging House should have a social investigation as well as a
physical examination in order that an intelligent diagnosis of his
condition can be made. Facts can thus be obtained which will serve
as the basis for an intelligent plan for his treatment.
The old method of lodging the homeless man and passing him
on or imprisoning him ; of giving him work in a wood or stone yard
or directing him to the nearest employer, with little regard for the
complicated causes of his condition and less for the opportunity of
developing within him the power of self-maintenance, — the old pro-
gram has been wasteful, wasteful of men and wasteful of the city's
charity fund.
Each homeless man who applies at the Municipal Lodging House
needs individual attention. Otherwise he would not be there. Be-
hind his need for food and shelter are basic needs which demand
intelligent diagnosis and treatment. The employable man without
a job needs to be directed toward a job without a man— a job for
which he is fitted. The unemployable man needs either to be treated
for the causes of his dependency, to be protected from the competi-
tion of the more fit, or to receive both such treatment and protection.
114 TRADE UNIONISM AND LABOR PROBLEMS
The physically handicapped need to be healed as far as is within
medical and surgical power to heal ; the mentally handicapped
need to be segregated, protected, and trained; the inebriates need
to be restored to health and disciplined for rational living ; the
habitually idle need to be constrained (or compelled) to work ; the
untrained need to be directed toward an occupation at which they
can earn a livelihood and be trained for self-support ; and the aged
need to be placed in homes. Dependent nonresidents, aliens, and
runaway boys need to be returned to their homes and to their
friends. If agencies for meeting these needs were maintained and
coordinated in the Municipal Lodging House as a central clearing
house for the homeless, that institution would serve as an avenue
of approach not only to a meal and a bed, or perchance to prison,
but to rehabilitation.
Robert B. Brown
IX
INTERSTATE MIGRATION OF NEGRO
POPULATION"
FOR a clear understanding of the northern migration of negroes
in the years 191 6 and 191 7 a knowledge of the general move-
ment of the negro population since 1865 will prove very useful. Sev-
eral recent writers have been prone to emphasize the development in
the negro within the past two years of "a sudden desire to move,"
but a little investigation soon reveals the fact that the black man, ever
since the day of his emancipation, has shown a tendency to migrate.
At the close of the Civil War, when told that he was free, the negro
at once began to put his freedom to the test ; and as the most palpable
evidence of his liberty was his ability to come and go as he chose, it
was only natural that he should begin to move about. At the end
of every year thousands of tenants in the Southern black belts may
still be seen removing to other farms, in many cases without even
taking the pains to examine beforehand the lands they are to culti-
vate or the houses they are to occupy. Such migi'ations do not appear
in the census returns, but their social and economic importance is
far-reaching. Dr. Booker T. Washington often found it necessary to
urge his people to abandon their moving propensities and to settle
down and acquire property. At gatherings of negro farmers he was
fond of narrating a homely story of a chicken which belonged to one
of these peripatetic tenants and which, from long-acquired habit,
would walk up to its owner's cabin door on every first of January
and squat down and offer its legs to be tied, preparatory to its
journey to the next farm.
The possibility of the migration of a great number of freedmen
from some sections of the South became evident almost as soon as
the Civil War was over, and as early as November 27, 1866, Gov-
ernor James L. Orr, of South Carolina, stated in a message to the
legislature that the negroes were —
iProm Journal of Political Economy, Vol. XXV (1917), PP- 1034-1043-
Ii6 TRADE UNIONISM AND LABOR PROBLEMS
invaluable to the productive resources of the state, and if their labor
be lost by removal to other sections, it will convert thousands of
acres of productive land into a dreary wilderness. For this reason,
I have felt it to be my duty to discourage their migration. The short
crops of the present year should stimulate the planter and farmer to
renewed energy and enterprise. He will, however, find his lands of lit-
tle value if he cannot command labor to cultivate them. If the negro
remain here, his labor must be made sufficiently remunerative to sub-
sist and clothe him comfortably. Schools must be established to
educate his children, and churches built for his moral training.^
This threatened migration, to which Governor Orr referred, was
a westward movement, from South Carolina, Georgia, Alabama, and
Mississippi to Louisiana, Arkansas, and Texas. It differed materially
from the later migration to the North. In general, the westward
movement in our country is actuated by causes similar to those that
prompt European migration to America. It is a movement from a
highly developed, densely populated region, where the economic stress
is acute, to a region more sparsely populated, with undeveloped re-
sources, where the struggle for existence is not so keen. This ex-
plains the lure of the Southwest for the negro, as well as that of all
the West for the white man. But there is another movement of
population that operates in a manner quite the reverse of the prin-
ciples just enunciated. This is the cityward movement, a migration
to a region of denser population, keener competition, and more acute
economic stress. Such a movement is the Northern exodus of negroes
in 1916-1917.
In the late sixties and early seventies the westward migration of
negroes attained considerable headway. It was at first a movement
of individuals and soon became one of groups. Railway and land
companies carefully fostered it and had their agents in various sec-
tions of the South, very much as transatlantic steamship companies
have maintained their runners in the remote rural districts of southern
and eastern Europe to encourage emigration to America. A well-
known negro educator states that in 1874 he heard one of these agents
boast that he had induced 3S,ooo persons in South Carolina and
Georgia to leave for Arkansas and Texas.^ This westward movement,
iSouth Carolina House Journal (1866), pp. 20-21.
2W. H. Crogman, Talks for the Times (Atlanta, 1896), p. 54. The agent's
statement is probably much exaggerated, but there must have been a consider-
able migration to have prompted him to make such a claim.
INTERSTATE MIGRATION OF NEGROES 117
however, was soon dwarfed into insignificance by a threatened migra-
tion on an unprecedented scale to Kansas from the lower Mississippi
Valley early in the spring of 1879. The " Kansas Exodus," as it came
to be called from its alleged resemblance to the flight of the Israelites
from Egypt, presents several striking analogies to the movement of
1916-1917. When the exodus to Kansas began, there was the same
suspicion, as noted in 191 6, that it was the result of efforts to colonize
negro voters in the North and make certain states safely Republican.
In both cases this suspicion was finally allayed. There were also, in
1879 as in 1916, the assumption by a portion of the Northern press
that the negro was fleeing North to escape ill treatment, and the
tendency on its part to lecture the South for its shortcomings in
dealing with the black man. One may also note, in both instances,
the same sort of uneasiness among the planters in those districts from
which emigration had been excessive, the same assurance- by some
that all of the negroes would eventually return, and the same intro-
spective editorials in Southern newspapers, with the candid admission
that conditions might be better for the negro, but with the added
assertion that even as things were the South was a better place for
him than the North. In both instances also may be observed the
final recognition that the causes of the movement were basically
economic. Of course, there are certain contrasts as well as parallels
in these two movements, but the latter appear to be by far the more
significant.
The Kansas movement of 1879 was due in large measure to the
agricultural depression in the lower Mississippi Valley, but it was
precipitated by the activities of a host of petty negro leaders who
sprang up in all parts of the South during the period of reconstruc-
tion. Foremost among these were Benjamin (better known as
"Pap") Singleton, of Tennessee, and Henry Adams, of Louisiana.
Singleton styled himself the " Moses of the Exodus " and^ personally
supervised the planting of several colonies in Kansas.^ Adams
claimed to have organized a colonization council which attained a
membership of 98,000.^
The exodus to the "Promised Land" of Kansas began early in
iW. L. Fleming, "'Pap' Singleton: the Moses of the Colored Exodus,"
American Journal of Sociology, Vol. XV, pp. 61-82.
2 Senate Report, 693, Part II, 46 Cong., 2 Sess,
ii8 TRADE UNIONISM AND LABOR PROBLEMS
March, 1879, and continued until May. The total number of emi-
grants, most of whom went to Kansas from Louisiana and Missis-
sippi, has been estimated at all the way from 5000 to 10,000, and
many thousands more had planned to move, but were deterred by the
misfortunes of those who constituted the vanguard. Leaving their
homes when the weather was becoming warm, the early emigrants
reached Kansas when spring chanced to be unusually backward and
the country was still bleak and desolate. Thinly clad and often
without funds, they endured much suffering from want and sickness,
and many of them became public charges. Societies were organized
expressly to care for the "refugees," as they were called, and large
numbers returned to their homes as soon as they were able, giving
such dismal reports on their arrival as to dissuade others from fol-
lowing their example. Perhaps a third of the emigrants remained,
and many of these eventually attained a fair degree of prosperity.
The movement was ill-advised, and too much based on the negro's
sentimentalism. To him Kansas, pictured as the home of John
Brown and the scene of many free-soil victories, seemed to be the
ideal home for the black man. But he found on arriving a harsh
climate, pioneer conditions, and small farmers who had no need of
extra laborers and who were not especially friendly to the negro.
That individuals from among this group of emigrants could surmount
such difficulties and attain no small degree of well-being is to the
credit of the race. While the exodus caused much suffering, de-
moralization, and loss of property among the emigrants, it seems to
have had at least one good result. In some instances it is said to
have caused an improvement in the condition of the negroes who
remained at home. In communities where there had been consider-
able emigration there was said to have been a tendency to reduce
rents and to offer the remaining tenants more favorable terms in
general than had obtained prior to the exodus. Such a result would
naturally be expected.
In 1 888-1 889 there was a considerable migration of negroes from
southern Alabama to Arkansas and Texas, as a result of the activi-
ties of labor agents.^ The rapid development of the mining indus-
try of Alabama in the nineties caused a rapid influx of negroes into
the mineral regions around Birmingham and was the cause of much
^Southern Farmer, Atlanta, Georgia, June, 1889.
INTERSTATE MIGRATION OF NEGROES 119
uneasiness among the cotton growers of the black belt. The advent
of the boll weevil caused a great migration of colored farmers in
1908-1909 from the cotton fields to the cane fields of Louisiana.
By 19 14 the cotton belt of this state had recovered from the de-
moralization that followed the advent of the weevil ; and the sugar
planters, depressed by the prospects of free sugar, were reducing their
acreage and employing fewer laborers. A tendency toward a counter
migration then showed itself, and labor agents again were active.^
These instances are cited in order to indicate that the Northern
migration of 1916-1917 is no new and strange phenomenon. It
differs from earlier movements chiefly in the matter of numbers in-
volved. The European war has simply hastened and intensified a
movement that has been under way for half a century. To the truth
of this statement the reports of the census bear eloquent witness.
In i860 there were 344,719 negroes in the North; in 1910 there
were 1,078,336, an increase of 212.8 per cent for the fifty-year
period. In the South for the same period the rate of increase was
1 1 I.I per cent. In the last half century, therefore, the relative in-
crease of negroes in the North has been nearly double that in the
South. This shows a decided change from the conditions prevailing
before the Civil War. At every census before i860, except that of
1840, the negro population of the South showed a greater relative in-
crease than that of the North. Since i860, however, the situation
has been reversed, as is indicated by the following table :
Percentage of Increase of Negro Population
Decade
North
South
Decade
North
South
1790-180O . . .
24.1
34-0
1850-1860 . . .
20.3
22.1
1800-1810 . . .
18.7
39-2
1860-1870. . .
[33-3]*
[8.8]*
1810-1820 . . .
18.0
29.5
1870-1880 . . .
[36.5]*
[347]*
1820-1830 . . .
29.2
31.6
1 880-1890. . .
16.2
I3-S
1830-1840 . . .
38-9
22.2
1890-1900 . . .
25.1
17.2
1840-1850 . . .
23-7
26.8
1900-1910 . . .
18.3
10.4
* Owing to the great irregularities in the census of 1870, especially as it relates to the Southern
states, comparisons of this year with those of i860 and 1880 are wholly misleading, and in the fore-
going table the percentages for these years are bracketed.
iNew Orleans Times-Democrat, Marcb 26, 1914.
I20 TRADE UNIONISM AND LABOR PROBLEMS
It thus appears that in every decade since the Civil War the negro
population of the North has been growing faster than that of the
South. This increase can be accounted for in two ways only : by an
excess of births over deaths and by immigration from other states.
The meager vital statistics available indicate that while the death
rate of the negro in the North is lower than that of the negro in the
South, the birth rate of the Northern negro is also lower and is just
barely sufficient to balance the death rate. The increase in the
colored population of the Northern states appears therefore to be due
almost wholly to immigration. The census fully substantiates this
assumption. In 1910, 415,533 Northern negroes were Southern born.
This is nearly two fifths of the entire negro population living in the
North. Forty-seven per cent of the negroes living in New England
in 1910 and more than 50 per cent of those in the Middle Atlantic
and East North Central divisions^ were born outside these sections.
In four of the former slave states (Maryland, Missouri, Kentucky,
and Tennessee) there were actually fewer negroes in 19 10 than in
1900. These, it will be noted, are border states, where "the call of
the North" is most likely to be first heard and heeded, and whence
migration is easier and cheaper than it is farther south. It is also
worthy of note that every one of the former slave states except Ar-
kansas was "whiter" in 1910 than in 1900.^ Indeed, if we exclude
from our reckoning states having a negro population of less than
2 per cent, the only states in the Union that became perceptibly
"blacker" in the last census decade were West Virginia, whose per-
centage increased from 4.5 to 5.3, and Oklahoma, whose increase was
from 7 to 8.3 per cent. The increase in these states, however, is not
large enough to give rise to problems like those in some sections of
the old South.
It is interesting to note that the New England states, before 19 10,
were not appreciably affected by the Northern migration. In three of
these states (Connecticut, Rhode Island, and New Hampshire) the
percentage of negro population between 1880 and 19 10 actually
iThe Middle Atlantic and East Nortli Central divisions comprise the states of
New York, New Jersey, Pennsylvania, Ohio, Indiana, Illinois, Michigan, and
Wisconsin.
2 While the percentage of negro population in Arkansas increased, it was only
to the extent of one tenth of one per cent.
INTERSTATE MIGRATION OF NEGROES 121
declined, in Maine it remained stationary, and in Vermont and
Massachusetts it showed a very slight increase. New Hampshire
actually contained fewer negroes in 1910 than in 1790.
Another very interesting feature of the movement of negroes in
the United States is the fact that, in spite of the northward tendencies
just described, the center of negro population has been shifting
steadily southward and westward. Since 1 790 the center has changed
from southern Virginia to northeastern Alabama. This is due to the
fact that the drift of negro population to the North before 19 10 was
most pronounced in the border states of Tennessee, Kentucky, Mary-
land, and Missouri, and that the increase in the states farther south
more than offset the losses in these four states.
The negro shows a tendency not only to move northward but also
to move about very freely within the South. In fact, the region
registering the largest net gain of negroes in 19 10 from this interstate
movement was the West South Central division .(Arkansas, Louisiana,
Oklahoma, and Texas), which showed a gain from this source of
194,658. The Middle Atlantic division came second with a gain of
186,384, and the East North Central third with a gain of 119,649.
On the other hand, the South Atlantic states showed a loss of 392,827,
and the East South Central states a loss' of 200,876 from interstate
migration. While the negroes have shown this marked inclination
toward interstate movement, they nevertheless exhibit this tendency
in less degree than do the whites. In 1910, 16.6 per cent of the negroes
had moved to some other state than that in which they were born,
while the percentage for the whites was 22.4. For the relative extent
of intrastate migration by the two races, figures are of course
unavailable.
As has already been indicated, the cause of the migration, like
that of practically all great movements of peoples, is fundamentally
economic. But this simple statement does not tell the whole story.
The causes may be grouped as beckoning and driving, the first group
arising from conditions in the North and the second from conditions
in the South. Among the beckoning causes in 1916-1917 were high
wages, little or no unemployment, a shorter working day than on
the farm, less political and social discrimination than in the South,
better educational facilities, and the lure of the city. Among the
driving causes were the relatively low wages paid farm labor, an
122 TRADE UNIONISM AND LABOR PROBLEMS
unsatisfactory tenant or crop-sharing system, the boll weevil, the crop
failures of 191 6, lynching, disfranchisement, segregation, poor schools,
and the monotony, isolation, and drudgery of farm life. There is a
noticeable tendency on the part of some negro leaders to attribute the
movement chiefly to the unrest due to mob violence and other ills,
social and political, that fall to the lot of the black man. When we
note, however, that lynching for the past twenty-five years has been
slowly but surely decreasing and that disfranchisement is no new
thing, but has been an accomplished fact for more than forty years,
it becomes evident that, whatever grievances of this nature the negro
may have against the South, he has at least no new complaint and
therefore no stronger reason for migrating on this account in 19 17
than he has had for several decades. If adverse social and political
conditions are the main cause of the Northern migration, it is asked,
why did the negro not go in the eighties and nineties when lynchings
were four times as frequent as they now are and when disfranchise-
ment was effected by "bulldozing" and tissue ballots rather than by
the more peaceful method of constitutional amendment ? The answer
to this question is that the negro has no greater grievances now than
formerly, but that he has a much better opportunity for escaping
these grievances than he has had heretofore. The driving causes in
the South are not of themselves sufficient to bring about such an
exodus as was recently observed. There must be an avenue of escape
to apparently better conditions, and this was presented when the
European war created a vacuum in the Northern labor market.
The effects of this interstate migration, like the effects of late
foreign immigration, are largely matters of the future. But certain
postulates with regard to the immediate effects may be readily formu-
lated. So far as the migrations tend to bring about an equilibration
of demand and supply in the labor markets of this country, the effect
will be beneficial. The abundance of crude, cheap, and easily man-
aged labor in the cotton belt has not been an unmixed blessing. It is
a well-established fact, too, that the negro does better in those dis-
tricts where he is greatly outnumbered by the whites than he does in
the black belts where he has little chance to study and emulate the
white man's skill, thrift, and energy. The negroes who go North
may thus increase their own productive capacity and, at the same
time, by relieving somewhat the congestion of black folk in their old
INTERSTATE MIGRATION OF NEGROES 123
homes, may improve the economic status of their neighbors who re-
main behind. A migration of negroes in any number is likely also
to affect the attitude of the Southern employer of colored labor. It
will tend to impress him with the idea of the black man's economic
value as he had not been impressed before. The exodus of 1879
effected such a change of attitude on the part of the Mississippi River
planters. A large number of them assembled in Vicksburg on May 5,
1879, and solemnly resolved " that the colored race has been placed by
the Constitution of the United States, and the states here represented,
on a plane of absolute legal equality with the white race," and " that
the colored race shall be accorded the practical enjoyment of all rights,
civil and political, guaranteed by the said constitutions and laws.'"^
The migration has also its debit side. As already stated, it is a
cityward movement of a rural population, and as such is attended
with all the difficulties and dangers incident to such a movement on
the part of any people. But there are additional difficulties when
the newcomers to a city — even a Northern city — chance to be
colored. They must live in the least desirable part of the town, on
filthy and neglected streets, and in poorly constructed, insanitary
dwellings, for which they must frequently pay exorbitant rentals.
There may be the additional handicap of industrial discrimination
on account of race.
Dr. W. H. Crogman, of Clark University, Atlanta, Georgia, a
well-known negro educator, twenty years ago set forth the evils of
this movement in the following words :
Nothing was ever clearer to my mind than that this interstate
migration has in it the seeds of moral death. It is a very Pandora's
box. It strikes at the roots of those things by which only any people
can hope to rise. It destroys the home wherever it is established, and
prevents its establishment where it is not. If retards the progress of
education and acts like a withering blight upon the influence of the"
churches. . . . Over and over again have I known persons to leave
their native state and after wandering through several others to
return finally to the very spot whence they had started, having in
that time gained nothing, acquired nothing, except that which is a
property common to all bodies once set in motion — a tendency to
keep moving.^
^Vicksburg Daily Commercial, May 6, 1879.
2Talks for the Times, pp. 253-254.
124 TRADE UNIONISM AND LABOR PROBLEMS
This statement, in the light of later developments, appears unduly
pessimistic, and would probably be modified by its author today ;
but the fact cannot be gainsaid that the mere removal of the negro
to another environment is not the ultimate solution of what we call
the "race problem"; at the most it can only modify the problem.
As the European peasant does not escape all his economic ills when
he stands for the first time under the Stars and Stripes, so the negro
will still have his troubles after crossing the Mason and Dixon line.
William O. Scroggs
Louisiana State University
X
A CLEARING HOUSE FOR LABORS
WE LACK labor. The railroads are crippled for want of it. The
farmers hesitate to plant seed for fear they cannot get labor
for the harvest. Factories, public utilities, ammunition factories,
shipyards, send up a cry for men. Strangely enough, tens of thousands
of men walk the streets of our cities in idleness in the midst of the
labor shortage. Appeals to patriotism apparently go unheeded. High
wages, instead of attracting them into steady employment, lead only
to more frequent periods of idleness. They profiteer in the nation's
day of stress as willingly as many of their employers. Neither im-
pairment of our military efficiency nor the sufferings of millions who
lack the necessities of life move them. What is the explanation?
Why this anomaly? Why a labor surplus in the face of a labor
shortage ?
An explanation which at least points to one important cause of
the phenomenon is this : labor is standing idle during a labor short-
age because an unorganized labor market has impaired the efficiency
and morale of hundreds of thousands of workers. Men have become
accustomed to idleness, unaccustomed to sustained efforts. Irregu-
larity of employment, migration from industry to industry, the
cheap lodging-house, the saloon, pawnshop, brothel, municipal police
court, and lack of continuing responsibilities have done their deadly
work. Men who started out with ambition and promise have degen-
erated into inefficient, irresponsible, migratory laborers— tens of
thousands of them into almost unemployable "bums."
Labor is not scarce in America so far as quantity is concerned. I
question the probability of any quantitative shortage of labor dur-
ing the war. If such shortages should occur, potential supplies
of female and minor labor will fill up the gap. But labor of quality
T- Atlantic Monthly, Vol. CXXI (1918), pp. 773-783-
125
12 6 TRADE UNIONISM AND LABOR PROBLEMS
is scarce in every manual occupation — in agriculture, mining, fores-
try, manufactures, transportation; and there is no reservoir from
which that quality shortage can be relieved. Our hope for relief rests
solely in such mobilization as will place the existing skilled labor
where it will do the most good, in subdivision and specialization of
tasks so that partly skilled persons may be able to perform them, and
in intensive training of promising young workers for such work as
they can be prepared for during the emergency.
One of the most striking phases of the labor shortage is the scar-
city of good common labor. Anyone knows that an employer Who
needs a machinist cannot use a casual laborer. It is not difficult to
realize that a farmer who needs a dairyman cannot use a harvest-
hand. But many people do not yet appreciate the fact that there
are different classes or types of common laborers, just as there are
different classes of mechanics. Degrees of reliability, intelligence,
steadiness, and physical efficiency are of just as great importance
among common laborers as degrees of skill among mechanics ; and
the presence or absence of these qualities means the presence or ab-
sence of ability to earn wages.
The shortage .of competent American labor is not simply a war
shortage. A considerable portion of our skilled labor supply has
always come from Europe, and a relative decline in the -emigration
of skilled laborers to America has been the mainspring of our interest
in industrial education in recent years. Everyone familiar with the
labor market has known likewise that the Italian and Slavic immi-
grants from southeastern Europe have furnished us with our princi-
pal supply of common laborers during the past two generations, and
that American common laborers have been, on the whole, of declining
value.
The shortage is no new one. But Europe has heretofore protected
us against the pressure of our lack. The war, with its stoppage of
immigration, contemporaneous with a sharp increase in the demand
for American products, raw and manufactured, suddenly made the
shortage acute. It twisted the tourniquet. We suddenly became
conscious that we were no more independent of Europe's birth rate
than we were of her dyes. We need labor now. After the war, when
millions of Europeans will have died in arms or been crippled in
action, will immigration relieve our shortage again? If it would, is
A CLEARING HOUSE FOR LABOR 127
it sane public policy to permit conditions to continue which destroy
the efficiency of hundreds of thousands of men, simply because we
can find others to take their places? Will a nation that is willing,
if necessary, to laty down the lives of millions of men and billions of
treasure to "make the world safe for democracy" allow social ar-
rangements to continue which condemn whole armies of men to
economic inefficiency and moral deterioration? .
One of the principal reasons why uncounted thousands of American
laborers are of such low quality that employers do not "want to
give them standing room," and prefer the immigrants, is a disor-
ganized labor market. Erroneous labor policies stimulate labor turn-
over and labor migration and result in a progressive deterioration of
the laborer. We educate them for inefficiency instead of efficiency,
and train them in shifting instead of in sticking ; we discourage self-
respect, encourage thriftlcssness, and compel continuous movement.
If we had set ourselves to devise ways and means of destroying the
efficiency of American labor, we could not have chosen methods better
suited to our purpose than the conditions characterizing our present
labor market. Constant labor turnover and constant labor migration
will demoralize a working force as rapidly as it can be accomplished.
I am not ignorant of the fact that many personal causes contribute
heavily to labor inefficiency. No man can watch the flow of migra-
tory labor through any distributing point, like Minneapolis, without
witnessing tragedies of drink, of drugs, of feeble-mindedness, of bad
home training, of defective education, and of moral failure that
wring his heart. But contact with tens of thousands of laborers of
every type and description has forced the conclusion upon me that
the moral failure of a very large percentage of these men is the
result of the industrial and social conditions that surround them
rather than of initial viciousness on their part. Initial personal fault
accounts for some of them. But economic conditions beyond their
control or understanding account for more. They are victims of
drink, vice, drugs, and women largely because the nature of their
work prevents a normal home life, normal community life, normal
citizenship.
You are familiar with common laborers. You see them daily,
standing on street corners, riding in street cars, sweating in excava-
tions, loafing at saloon or pool-room doors. You have probably
128 TRADE UNIONISM AND LABOR PROBLEMS
hired them at one time or another. You may have shared their life.
But have you ever really become acquainted with them? Do you
know where the common laborer comes from, what his experiences
are, what becomes of him, what his types are? Or is he one of
those commonplace experiences that you are so familiar with that you
do not really know anything about him ? You know that there are
more than a dozen different kinds of machinists, and that different
kinds of carpenters have different types of skill which bring varying
rates of pay. Do you realize also that there are at least five distinct
classes of common laborers, varying in skill, in the kinds of work
they follow, in productive capacity, in earning power, in social
significance ?
II
I was in a gas-retort house one night in Oshkosh, Wisconsin. It
was the hour for drawing the coke and recharging the retorts. Three
stokers opened the little retort doors and drew the red-hot coke
out on the floor. Then, standing twelve or fifteen feet away from the
red-hot open retorts they threw from 400 to 600 pounds of coal, with
scoop shovels, into openings twenty-one inches wide and fourteen
inches high and filled nine retorts without letting a single piece of
coal fall on the floor. They were common laborers. They worked
twelve hours a day and seven days a week. Their job consisted
simply in drawing coke, cleaning retorts, and shoveling coal into
the retorts. But they had the skill of men who had thoroughly
learned a job, who had developed an expert skill in that job, who
remained steadily on the job. They were a part of that plant. But
more than that, they were heads of families, citizens of Oshkosh,
integral parts of the economic, political, and social life of the nation.
Here is the first and highest type of the common laborer : the
man who is a part of an industry, who has an occupation, who is' a
citizen in a community, is the father of a family, perhaps a member
of a lodge, a club, or a church. You find this man by the million in
our industrial and social life. He runs the bulk of our simpler
machinery, operates our street cars, furnishes our watchmen, janitors,
and a thousand other kinds of steady help. Upon his shoulders
rests a heavy portion of our social fabric. He represents no social
problem so long as he can maintain this status — except the problem
A CLEARING HOUSE FOR LABOR 129
of an income inadequate to provide his family with a safe subsist-
ence and a dependable future. Probably four out of every ten
workmen are found in this category.
But this is not the only type of common laborer who is a per-
manent factor in the life of the community. A second important type
is the man who works irregularly, who has a continuous succession
of employers. He works for a while for contractor Jones, then for
Smith, then for Brown. He gets a temporary job in a factory, then
in a brickyard, and next in an excavation. At his best he is a man
with a family — struggling for existence. His wife commonly assists
in the bitter struggle by keeping boarders, or by doing washing or
sewing; his children are foimd at the workbench as early as the
law allows, and high-school education is not a thing that his family
can think about. In a somewhat lower variation of the type we find
this family intermittently on the rolls of the charities, whenever two
or three weeks of continuous unemployment, a sickness, or other
slight calamity assails them. In a third variation we find a single
man living in cheap boarding houses and generally deteriorating
steadily under the influence of drink and irregular habits. The
struggle for existence of the married man of this last class is harder,
more bitter — but he has more to fight for.
The distinction between this general group of laborers and the one
first described is found in the relative steadiness of the first group's
employment and the relative unsteadiness of the second's. One works
for the same employer for considerable periods of time ; the other
changes employers frequently. Individuals of the first group frequently
pass into the second group, when they lose their steady jobs and are
unable to get others. Individuals of the second group sometimes pass
into the first group by fortunately dropping into a steady job.
To some this may seem a flimsy basis for classification. It seems
somewhat vague, leaving a middle ground, a twilight zone, where a
considerable number of people lie in either group, or both, or some-
times in one and sometimes in the other. But it at least has the
merit of conforming to life, and it calls attention to two types whose
life experiences differ considerably. The members of the group with
steady employment are never far from destitution. They are poor,
very poor. They have a hard time to make ends meet. They com-
monly have to take their children out of school by the time that they
130 TRADE UNIONISM AND LABOR PROBLEMS
are sixteen years of age. A period of unemployment, a bad sickness,
or other misfortune will quickly bring them to the point where they
must have help. But ordinarily they are making ends meet. The
wife or children may have to earn part of the living, but the family
is self-supporting, and as it looks ahead it sees a prospect of steady
income and of continuing self-support. It has a certain sense' of
assurance, of confidence, of hope.
The group which works at a succession of jobs, on the contrary,
continually hears the wolf's claws scratching on the door. They
hve in constant uncertainty, constant fear. They have no assur-
ance of continuing income, no solid basis for hope, no opportu-
nity to get a few dollars in the bank, no justification in starting to
buy a home. They are living from ha,nd to mouth, and never know
at what moment the hand may be empty. Their self-respect and
honesty are always under the strain of fear ; their working efficiency
is deteriorated by a continual change of jobs that makes it im-
possible for them ever to attain efficiency at any. They are, by
force of necessity, jacks of all trades and masters of none, and after
they pass thirty-five and their strength begins to wane, the effects
of undernourishment and the declining courage that accompanies a
life of fear all bring a steadily declining efficiency.
The "professional casual" is a third distinct type of resident la-
borer. He is a distinctly lower type than either of the others, but
recruited from their ranks. Every employment office is familiar with
this type. Any city with three hundred thousand people will have
perhaps three or four hundred well-known individuals. Some of
them are steady patrons of the state or municipal offices, some of the
Salvation Army, some of the charities. Others hang around saloons,
hotels, settlement houses. Individuals of the type can be found in
almost every country town and rural community. They' are a
distinct social group.
At some times, especially in the winter, the employment office finds
among them laborers and mechanics who ordinarily work steadily
but who are temporarily unable to get work and are taking odd jobs to
carry them along. For instance, our office carried a machine oper-
ator with a wife and family for about four months at odd jobs, until
he was able to get a steady job. He has now been working steadily
ever since last September in a machine shop. But these are not
A CLEARING HOUSE FOR LABOR 131
casual workers. They do not belong to the type. They are doing
casual work only temporarily, and they neither live the life, nor think
the thoughts, nor have the point of view of the true casual.
The casual never seeks more than a day's work. He lives strictly
to the rule, one day at a time. If you ask him why he does not take
a steady job, he will tell you that he would like to, but that he hasn't
money enough to enable him to live until pay day, and no one will
give him credit. If you offer to advance his board until pay day, he
will accept your offer and accept the job you offer him, but he will
not show up on the job, or else will quit at the end of the first day.
He has acquired a standard or scale of work and life that makes it
almost impossible for him to restore himself to steady employment.
He lacks the will power, self-control, ambition, and habits of in-
dustry which are essential to it.
The causes which produce the casual are many. A striking number
of them are young. In general, these seem to be defective — de-
fective in those mental traits which are the basis of industry and
ambition, and in the sense of responsibility ; defective in moral stam-
ina or training and addicted to drugs, drink, and vice ; or defective
physically and unable to do steady, hard work. Absence of the moral
ideas and motives which cause most of us to work is probably more
important in explaining these younger casuals than any other one ex-
planation. Some of them have families which they make little or
no effort to support, never working if they can get someone else to
feed them. Others do not know in the morning where they will lay
their head at night. They live permanently in the city, but have no
residence. Some of them are moral failures, some defectives.
When we turn to the group of casuals who are older, their explana-
tion is even more complex. Many are moral failures, mental de-
fectives, or physical unfits, as already described. .Others are the
residuum of our labor market. Starting out as common laborers
twenty years before, they were for a time steady workmen; then
they became subject to irregular employment, either because of in-
dustrial conditions or because of drink or a taste for traveling.
Gradually they became more and more irregular in their working and
life habits and crystallized into casuals living from day to day and
hand to mouth, without self-respect or ambition. They are almost
parasites in the body politic.
132 TRADE UNIONISM AND LABOR PROBLEMS
Not all common laborers are residents of a community, however.
Intermingling with the resident laborers we find a multitude of men
who are continually wandering from place to place — today working
in a factory in Minneapolis; a month from now on a construction
job in Des Moines ; later, bobbing up on a dam job in Wisconsin ;
migrating to the harvest fields in the fall, and then to the woods, to
construction work, or to some factory job for the winter. These men
too reveal distinct subgroupings. We find among them temporary
migrants, skilled migrants, common laborers, and tramps.
The temporary migrant is found particularly in agriculture and
contracting. Many farmers, farm hands, and city men, who are
permanent residents of some community for the bulk of the year, go
to the harvest fields in the fall. Many carpenters, painters, and other
classes of mechanics or steady laborers leaye town during periods
when local employment is slack and good opportunities are presented
elsewhere. This is particularly noticeable now, when so many are
leaving their permanent homes to work for the government in other
localities. But most of these men will either return to the towns
from which they start or else take up a permanent abode in some
other locality. They do not spend their life in travel.
The true migrant — the Ishmaelite of modern times — has no
abode. He lives where he happens to be. If he gives you a so-called
permanent address, it is the place he left years ago, never to return,
or else it is fictitious. This type of migrant reveals two distinct
classes — the skilled migrant and the unskilled.
We find the skilled man in such types as tile ditchers, cant^hook
men, farm hands, and steam-shovel engineers. Side by side with them
are common laborers who work on construction of dams, railroads,
bridges, in the lumber woods and harvest fields, or wherever large
gangs of men are assembled from distant places.
These men have no homes. They have either no families or sev-
eral families. They live in the camp or the lodging house. Their
pleasure is found in the saloon and its accompaniments, in the pool
room or the movie, or in the rough jokes of the camp. When in
town they are the prey of the saloon, the "hook shop," the second-
hand store, the employment agency, the municipal police court, the
lodging-house thief, the pickpocket. On the job they are ordi-
narily parts of a gang, who are "hands" in the eyes of foremen and
A CLEARING HOUSE FOR LABOR 133
employer. In camp their lot is often little better. I have known cases
where men have worked a month and have been in debt to their
employer at the end for employment fees, post-office fees, board,
hospital fees, and transportation.
When I was a child I was much interested to learn that the Ara-
bian Bedouins, wandering over the desert, travel certain routes year
after year by which they pass through certain oases at certain times.
Tens of thousands of these camp workers follow a similar trail —
passing from industry to industry and locality to locality in a more
or less regular path of migration. As the seasons pass they move from
contracting to harvest to lumber woods to railroad work, and often
insist on going to certain definite localities at each season.
I am trying to make clear that we have in America several hun-
dred thousand, probably more than half a million men, who have no
homes, who are residents of no community, who are parts of no
particular industry, whose contact with the life of our nation con-
sists in contact with cheap lodging houses, private employment
agencies, second-hand stores, and pawnshops; vicious women, sa-
loons, and municipal police courts ; industrial camps, where the
minimum of decency and cleanliness is maintained ; the brake beams
of the freight car ; and a total absence of any home, church, or
community life.
These Ishmaelites of the twentieth century are one of the by-
products of our economic system. The exploitation of a continent's
natural resources, the single-crop system of agriculture, the alterna-
tions of industry due to the seasons, the fact that in a new country
labor has to be attracted to new points in the process of developing
new enterprises^ have been the economic bases of a labor-distribution
system in which labor has been shifted here and there to meet the
demands and needs of capital and land. We have forgotten that
while labor may be a commodity, laborers are not. We have met the
needs of industry without protecting the personalities of laborers.
We have developed our resources while spoiling citizens. Hundreds
of thousands of men for whom no individual industries, no commu-
nity, no particular group of socially visioned people have felt them-
selves responsible have been steadily deteriorated and ruined by a
life of migration and irresponsibility.
134
TRADE UNIONISM AND LABOR PROBLEMS
III
We will now trace the relation of the emplojonent system in
America to the labor types. We are very charitable in speaking of
it as a system, for it is precisely the absence of any system of distrib-
uting labor which is the outstanding characteristic of the situation.
We have, in all centers where laborers congregate, commercial
agencies which make a business of selling jobs to laborers for a fee.
We have state and municipal offices in nearly half of the states, but in
most cases each local office works individually and without any cor-
relation with other public offices in the same state. The federal
government has had an extremely crude employment system in the
post offices, and has made a weak attempt at federal-state cooperative
offices in the Immigration Bureau. Both of these experiments were
failures, and the federal government is now attempting to develop
a real organization of the labor market through the Department of
Labor. Little practical progress has been made, and no genuine
success will be achieved until the nation more fully recognizes some
of the fundamental facts in the situation with which it is seeking
to cope.
The essence of our industrial policy with respect to labor has been
continuous turnover. In every industry, though not in every individ-
ual establishment, our employers have followed a policy of hiring
and firing. If a man did not happen to make good at a particular
task, he was discharged and someone else hired, instead of being
transferred to some other task better adapted to his qualities. Fore-
men have considered the power of discharge as their one unfailing
method of discipline. Discharge has been in industry what spanking
used to be in the home and the schoolhouse. In each case it has
been the means by which those too lazy to think of better ways of
proceeding have dealt with the weak in their power. Excessive
discharge in industry has been as disastrous in its effects on the
industrial arid social efficiency of labor as excessive whipping on the
soul of a child. It has weakened the worker's self-respect, decreased
his self-reliance, and encouraged subservience. The continual change
of jobs has prevented the worker from ever learning any job well
and has destroyed all interest in his work.
The losses are equally disastrous from the employer's point of view.
A CLEARING HOUSE FOR LABOR 133
It takes the time of foremen and bookkeepers to hire and fire, and
the time of foremen to instruct the new hand ; fellow employees and
machinery are slowed down while he learns his job, and breakage
and waste are increased. Millions of dollars are lost to employers
every year by the slowing down of their plants and wastage of time
and materials caused by excessive labor turnover.
There are certain principles which I believe must be recognized
in order to reduce the social losses that I have been pointing out.
We must have a system of employment offices, national in scope and
monopolizing the whole employment business, which will be so care-
fully worked out that every worker can be placed in the nearest
job that he is able to fill and will have access to every job open to a
particular capacity. Our systerii must be able to keep every work-
man employed with the maximum steadiness ; must be able to sift
and classify the laborers, so that individuals who have a tendency to
degenerate into casuals may be spotted and if possible held to
steady employment ; and must be able to sift out and furnish em-
ployers with the kind of men they want. It must dovetail the indus-
tries of each locality so as to use every man in the locality as
steadily as possible in that locality.
To accomplish these manifold purposes we must have a national
system of employment offices, with branches in every locality and a
central clearing house. Within this national system must be zones,
or districts, with clearing houses for each district ; and within the
districts must be subdistricts with their own clearing houses. If a
local office "in a subdistrict could not fill an order, it would tele-
phone the order to its clearing house, which would seek to obtain a
man from some other local office in the subdistrict. If the demand
could not be filled in the subdistrict, it would be transferred by the
subdistrict clearing house to the district clearing house, which would
seek a man in the district. Similarly, if the district could not fill
the order, it would clear the demand through the national clearing
house.
This clearing-house system, if it were combined with a monopoly
of the labor market, would enable the public employment offices to
check labor migration by always finding the nearest man who was
competent to fill the position. We should not then have men leaving
Chicago to fill jobs in St. Louis at the same time that men are leaving
136 TRADE UNIONISM AND LABOR PROBLEMS
St. Louis to fill the same kind of jobs in Chicago. The pressure
would be put on men to make them remain where they are, instead
of to cause them to move. Within a big labor market like New
York or Chicago tens of thousands of jobs would be filled annually
by local men which are now filled by outsiders ; tens of thousands of
men kept at home who are now emigrating to other localities.
The effect which such a system of offices might have upon labor
turnover is even more important. That portion of the labor force
which is most frequently changing jobs would soon be recorded in
the files of the employment offices. A glance at a workman's card
would show his history — whether he was a casual, an irregular
laborer, or normally a steady man. It would show the kind of work
he has followed. Any local office desiring further information con-
cerning a certain man could quickly get it by telephoning or tele-
graphing other offices in which he was registered. The sifting of
men and their individual treatment would become a practical possi-
bility instead of a theoretical ideal. The offices could use pressure
to hold a man steady.
The record of employers would be equally useful. Those plants
which revealed excessive turnover could be easily sifted out, and
the matter brought to the attention of their managers. By personal
interview, bulletins, and correspondence the offices could call to the
employers' attention the causes of excessive turnover, its cost, and
its treatment. The criticism of workmen against individual firms
could be brought to the employer and the faults corrected.
To illustrate: A certain firm in Minnesota has been employing
200 or 300 men in a construction camp for about two years. They
have a good camp, with steam heat, iron beds, good wash rooms, and
other conveniences. The firm provides good food. The foremen do
not drive the men. The wages are high. Nevertheless an excessive
turnover of labor continued. The public employment bureau deter-
mined to find the cause. Upon investigation, man after man re-
ported that the company was providing good food, but poor cooks
were spoiling it. The company, for their part, showed that they
were paying high wages to their cooks. But they were not getting
the service. Correction of the difficulty quickly cut the turnover.
In two similar cases it was found that a brutal foreman was the
cause of frequent quitting ; in another, wages had fallen below the
A CLEARING HOUSE FOR LABOR 137
market rate. An office in continuous touch with the employers and
men of a given labor market develops a surprisingly intimate
knowledge of the conditions in the several establishments.
But most important of all the advantages are two — that the
market for labor would be centralized and that those in charge would
be interested in serving the needs of the employer and the employee
rather than in personal profit. Centralization in the labor market has
the same advantage that centralization in any market has. The buyer
and seller have the maximum opportunity of getting in contact with
someone with whom they can do business. At present, with a large
number of unrelated employment offices operating in the same town,
— state, federal, commercial, philanthropic, trade-union, and the
rest, — the employer who wants a certain kind of man frequently
places his order in one office while the employee who seeks that kind
of work files his application in another. The two fail to meet.
With a single coordinated system of offices the two will come to-
gether in every instance.
An employment system run for profit will never give either our
industries, our workers, or the nation sound service. The profits
of the emplo3mrient agent come at so much per head. The more
heads, the more dollars. The greater the turnover, the larger the
profits. The interests of the employer demand a small turnover.
The interests of the laborer demand a steady job. The interests of
the employment agent are exactly opposite ; the more men he sends
out, the greater the number of fees. Private agencies are daily
shipping men by the thousands who they know will not stick. Fre-
quently they know that the man's real intention is to jump the job
he is sent to and go to some near-by work. But what's the differ-
ence ? Large turnover means large fees, and large fees are the object.
The state and municipal offices as heretofore managed in this coun-
try have in most cases (not in all) developed a similar motive favor-
ing turnover. In their case it is unconscious. They measure their
efficiency by the cost per head to the state of the men sent out.
They brag that it has cost the state but 30, or 25, or 19 cents per
man sent out, as compared with the $2 fee collected from workmen
by the private «agencies. Since most of the state and municipal
agencies have a set budget, say $5000 or $10,000 per year, approxi-
mately, all of which they spend, their average cost is lowered in
138 TRADE UNIONISM AND LABOR PROBLEMS
proportion to the number of men sent out while spending the appro-
priation. The larger the business, the smaller the average cost per
job filled, and the better the showing. The natural result is an
emphasis on the number of men sent out rather than on the quality
of service rendered. Instead of studying their local market, to
develop policies that will give the local workers the maximum con-
tinuity of employment and local employers the steadiest possible
labor force, their effort has been concentrated upon getting orders
for jobs vacated and men to fill thepi. They have made no effective
effort to decrease labor turnover, and if they do, they will impair
their showing before their legislative bodies by running up a higher
per-capita cost for placement. Cheapness rather than quality has
been the criterion thus far applied to their service. And it is the
criterion that will continue to be applied until we establish a com-
prehensive system of employment offices, in charge of men who under-
stand the employment problem and are technical experts in dealing
with it, and who are independent of the annual and biennial criticism
of local legislative bodies not conversant with the problems being
worked out. It is only under such conditions that the employment
organization can attack and solve the vital problem of our. labor
market.
IV
I have emphasized two points as fundamental to a successful or-
ganization of the labor market : first, a consolidation of all public
employment agencies into a single system under the auspices of the
federal government, with subdistricts and clearing houses just as we
have in the Federal Reserve banking system; and, second, a mo-
nopoly of the labor market, so far as employment-agency work is
concerned, by this federal employment system. A further word on
these two points is now necessary.
The country had no lack of emplo5mient agencies when the war
broke out ; it has none now. The only trouble is that they are not
of much use. The postmasters were acting as employment agents.
The Federal Immigration Bureau was also running a system of em-
ployment offices. This is now discontinued, and a new set of federal
offices, under an employment chief of the Department of Labor,
is in process of establishment. More than one half of the states
A CLEARING HOUSE FOR LABOR 139
had state employment offices. Many municipalities had employ-
ment offices. The Y. M. C. A. and Y. W. C. A., charity societies,
commercial associations, settlement houses, the Salvation Army, and
other semipublic or charitable organizations were running a host of
agencies, more or less defiled with the taint of charity. Thousands
of private profit-getting agencies v/ere in operation in all of the
labor centers.
The number of employment agencies in the country ran into the
thousands, probably the ten thousands. But each was a distinct
unit. The postmasters had no effective system of cooperating with
each other and made no attempt to cooperate with the immigration-
bureau offices. The various immigration offices were distinctly local
and had no system of cooperating with one another. They had no
clearing houses. They were in no effective cooperation with state
offices except in half a dozen cities. The state offices of each state
were, as a rule, run as local offices and without any centralized
management of the state labor market. The philanthropic agencies
cooperated neither among themselves nor with the public offices.
Decentralization, disorganization was — and is — the keynote of the
situation.
The first essential step now is legislation that will weld all of the
existing state and municipal offices into a federal system, centralized,
coordinated, systematically managed, and controlled by big, far-
seeing policies. The same legislation should eliminate forever the
private commercial agency, which has cursed our economic system
far too long. Monopoly is essential in order to insure that all orders
for men and applications for work shall be brought to the same office,
so that buyer and seller may have their needs met with maximum
rapidity and efficiency. It is likewise essential to check turnover
and migration. Philanthropic agencies, operated without profit to
their owners, might be permitted to continue if operated in close
cooperation with the public system. But practically all of them
would go out of business as soon as a proper organization of the
market was established.
The plans suggested are not theoretical. England has for years
been operating a system of employment offices not materially dif-
ferent from the plan suggested. Ohio is today operating a system
of twenty-two offices on simDar principles. A clearing house for
140 TRADE UNIONISM AND LABOR PROBLEMS
public noncommercial employment agencies is now clearing for
over seventy agencies in New York City. Many able men in this
country are already sufficiently experienced in employment-office
management and sufficiently conversant with the problems to be
solved to undertake the installation of an American system that
will be an ideal for the world.
The war has revealed how acute is the need. The time is ripe. An
aroused public should demand a termination of the suicidal labor
policies which have been ruining the efficiency of American labor.
Don D. Lescohier
University op Wisconsin
PART III. LABOR MANAGEMENT
XI
SCIENTIFIC SHOP MANAGEMENT ^
MR. TAYLOR . . . The development of a code of laws, of a
science to replace the old rule-of -thumb knowledge, — recording
it and reducing it to laws, — is the first principle of scientific manage-
ment. Second, the scientific selection of the workman and his train-
ing. Third, the bringing of the science and the trained workman
together. And fourth, some scheme, joint effort, to make it worth
while for the workmen to work according to the new scheme. Pig-
iron handling is the cheapest form of labor known. . . . Probably
the most important element in the science of shoveling is this:
There must be some shovel load at which a first-class shoveler
will do his biggest day's work. What is that load? To illus-
trate: Right back of the office of the Bethlehem steel works, there
was a train of rice coal being pushed in and the right kind of
fellows at the shovels. No fellows could work better than they
worked. But we saw first-class shovelers go from shoveling rice
coal with a load of s}i pounds to the shovel to handling ore from
the Messaba Range with 38 pounds to the shovel — S/4- to 38
pounds. Now it don't take much science to see that they can't both
be right. Now, what is the proper load for a man to take on a
shovel ? It was up to us to make a scientific investigation of shovel-
ing. This lasted more than a year of constant study and work. In
making that investigation a number of men were busy at it all the
time — high-class men, men who were very much in earnest. Here's
a sample of the way to go at it. There is nothing too small for a
careful, thorough study. What we did was to call in two big, powerful
shovelers. Let me point out, gentlemen, some people would say, why
iFrom publication of the Milwaukee Federation of Labor, 1914. Discussion
by Frederick W. Taylor and N. P. Alifas, representing Metal Trades Depart-
ment of the American Federation of Labor.
141
142 TRADE UNIONISM AND LABOR PROBLEMS
didn't you pick out some weak ones ? Because we have common
sense ; because we propose to get the right man doing the right work.
Well, we called in two powerful shovelers. That's one of the char-
acteristics of scientific management. First-class men for the job.
These men were then talked to in about this way : " Now, Pat, yon
are going to be asked to do a whole lot of fool things. A young fel-
low is going to write down all of the things you are doing. What we
are after is certain facts. What we want you to do is to work, just
the way you are told to work. If you do that,^and we know you
think it will be a disagreeable thing, — we are going to pay you
double wages while you are doing it. Whatever he says goes. He
looks like a fool, but don't you get it through your head he is a damn
fool. You try to soldier on him and you will never come back here
again. I want each of you fellows to work so as to go home properly
tired but not overstrained. There is going to be no more soldiering
and you have got to be just as careful not to do too much as not to
do too little. Why ? Because we want our men to do something that
they can do throughout their lives without hurting themselves."
Why ? Because this whole scheme depends on getting the maximum
output. You have got to do a good, proper day's work, but there is
no such thing as nigger driving under scientific management. . . .
You put a man to shovel a load and give him on his first trial a
big shovel, shoveling all day long. The number of shovelfuls, 38
pounds on the shovel, were counted. We then cut the shovel off so
that it held about 34 pounds. He shoveled more stuff with the 34-
pound load. With a 30-pound load he shoveled still more tons per
day. A 21-pound load was the maximum. With the 18-pound load
he shoveled less. That is, the powerful workman, well suited to his
job, did the biggest day's Avork with this 21-pound shovel. How far-
reaching is that law ? Under the old system every fellow owned his
own shovel. Every man went at it each day as he saw fit, and the
shovel was the same size, whatever the kind of work. Now, as a
matter of common sense, we saw at once that it was necessary to fur-
nish each workman each day with a shovel which would hold just
21 pounds of the particular material which he was called upon to
shovel. That meant that where a man was handling great big gangs
before, now we had to handle each man by himself. Each man had
to be studied as a man and find out what he was fitted for. We had
SCIENTIFIC SHOP MANAGEMENT 143
to study each man's work every day. . . . We had to have men
teachers appointed to show those men how to shovel and how to shovel
right, to teach them how to shovel. We had to have men figure up each
night just what every man of that gang did the day before. The first
thing each workman did when he came into the yard in the morning —
and I may say that a good many of them could not read or write —
was to take two pieces of paper out of his pigeonhole. One of those
slips of paper informed the man in charge of the tool room what im-
plement the workman was to use on his first job and also in what
part of the yard he was to work. The second one was a white or
yellow slip of paper. It told what they earned yesterday — how they
fell down. If it was a yellow slip of paper they knew they had fallen
down. If that happened three or four days they would hear from
it. The old way of treating a man would be to say to him, " Pat, you
are no good, now get out of this." Now let me show you what hap-
pens. Generally the man was sent down to him that taught him how
to shovel. "Here, Jim, you have got four or five of those yellow
slips. Have you been drunk, or are you sick ? Because if you are sick
we will give you a show somewhere else for a while, while you are
getting better. Have you forgotten how to shovel ? Go ahead and
shovel and I will see what's the matter with you."
Now that teacher knows all about the art of shoveling, and he
not only knows how to shovel but he knows how to show another
fellow how to shovel. Now he says to that workman : " Go ahead
and shovel." He finds almost every time that the fellow forgot how
to shovel. Now, gentlemen, I dare say some of you have done some
shoveling, but whether you have or not, I am going to try to show
you something about the science of shoveling. There is a good deal
of refractory stuff to shovel around a steel works; take ore, or
ordinary bituminous coal, for instance. It takes a good deal of effort
to force the shovel down into either of these materials from the top
of the pile, as you have to when you are unloading a car. There is one
right way of forcing the shovel into materials of this sort and many
wrong ways. Now the right way is to press the forearm hard
against the upper part of the right leg just below the thigh, take the
end of the shovel in your right hand and when you push the shovel
into the pile, instead of using the muscular effort of your arms, which
is tiresome, throw the weight of your body on the shovel. That
144 TRADE UNIONISM AND LABOR PROBLEMS
pushes your shovel in the pile with hardly any exertion and without
tiring the arms in the least. Teaching a man how to shovel requires
the same sort of coaching as there is in baseball. Then there are
lots of other elements in shoveling, the shape of the shovel, etc.
Now the new idea that comes under scientific management is that if
that man isn't shoveling right it's our fault, because we haven't
taught him right. It's not his fault. We don't go down there blam-
ing him. It's up to us. We have failed somewhere. The proba-
bility is, it's the management's fault. All that costs a whole lot of
money. The question is. Does it pay? No scheme which doesn't
pay for itself as it goes along can be worth anything. It won't persist.
A very proper question is, Does this thing pay ? If it doesn't pay, it's
no good. At the end of three years we had a good chance to find out.
There were several million tons of material handled in the Bethlehem
Steel Company in the course of a year. Under the old system it
cost between 7 and 8 cents to shovel a ton. Now, after paying for
all the clerical work which was necessary under the new system,
for the teachers, for building and running the labor office, and then
paying the men 60 per cent higher wages than they got before, the
cost of shoveling a ton was reduced from between 7 and 8 cents under
the old system to between 3 and 4 cents under the new system. In
addition to that, the saving during the last six months of that three
and one-half years was at the rate of $78,000 a year. And the
workmen there got justice, there was friendship in place of enmity.
I had them look up those men, and they were all happier and
better off. That is the justification of scientific management. You
have got to have that every time, or else scientific management
doesn't exist.
Mr. Alifas ... In regard to our objections to the system, I
might start in by telling you what we consider its possibiUties. These
possibilities are the main objections we have to the system. . . .
If it is a fact that workmen are loafers as a general thing unless
somebody gets behind them with a whip to spur them on, and the
employer is to blame for that, why of course he will take that blame
very kindly, due to the fact that he thinks he hasn't got behind them
strong enough. There are a great many forms of stimuli added to the
stimulus that is ordinarily used. As to the machinists, those that are
organized, they don't favor any system that gives them any more
SCIENTIFIC SHOP MANAGEMENT 145
stimulus than the stimulus that is ordinarily in vogue under day-
work. They find that the fear of discharge and the supervision of
the foreman, and the desire of the men to retain the good will of
their employers, are sufficient for all purposes to make them do a
desirable day's work. . . .
One of the first stimuli that has been added is the premium system.
And of course it is well recognized that if a man, in addition to the
fear of discharge and the fact that he has to do a good day's work,
is induced to speed up by means of being offered a reward, it will
stimulate his movement just that much faster. 4
A great deal has been said here in regard to the very unsatisfac-
tory method of getting prices finally set by means of piecework. It
appears that the employer can't resist the temptation to cut prices if
a man makes more than he thinks he ought to make. The inference
seems to be that the employer loses that notion once he tries scientific
management. As we look at it, it resolves itself down to this : Piece-
work is paid on a basis that is more like guesswork. If an, em-
ployer has found out just what the least time is that a man can do a
job under the premium system with a time-study method of ascer-
taining the time, he arrives at that time in the first place, so that he
doesn't have to reduce the man in order to get him down to the very
highest speed and lowest wages. An employee under piecework
would at least be having the advantage of not having to work quite
so hard and getting better wages while the cutting was going on.
Of course, if they continued piecework long enough, they would
eventually get down to the basis where an employee could just about
make what the employer thinks he ought to make.
It is advocated that once the system gets started, they should
add another stimulus to the premium. That is, they would start a
system — the differential piecework system, that consists of ascer-
taining what the maximum amount of work a man can do in a day is,
and when they find that, then offer him a piece price in addition to
a bonus. An illustration has been given : Say a man could make ten
pieces in a day. He would get 35 cents a piece for those. If he
makes nine and three-fourths in a day, he would get only 25 cents
a piece for them. That would furnish a man with a powerful in-
centive to speed up abnormally. That is an incentive that is much
higher than even the premium system or the piecework system. It
146 TRADE UNIONISM AND LABOR PROBLEMS
would be clear to you just why the premium system is a system that
contains more stimulus than the piecework system. Under the
premium system, as it is in vogue at the Watertown arsenal, if it has
been discovered, say, that the least possible time in which a job of
one hundred pieces could be done is forty minutes, they add 40 per
cent to that and say if a man can do that inside of an hour he shall
get paid, say, one half a cent or half of his rate for every minute that
he saves under that. He would be getting 40 cents for doing that
hundred pieces instead of 30 cents. The faster he does the job, the
more money he gets for the job.
Now another stimulus that they propose is that if a foreman is
given a premium in proportion to the number of men under him
that are making a premium, he will have a greater interest in
getting them to do more work. Of course he will. If a foreman is
going to lose money every time one of his men fails to make his pre-
miums, he is going to get after that man. It isn't going to be a ques-
tion of investigating to learn just why the man couldn't do a day's
work and endeavor by coaxing and persuasion to get him to do it,
but by something more forcible than that.
Now there is the question of the amount of premium that a man
shall get. According to the way this question was explained by
Mr. Taylor in his work, the amount of premium is regulated by what
they can get the men to exert themselves for ; that is, if by a series
of experiments it was found that if they paid 15 per cent premium,
the men would not do the work. If they paid 45 per cent pre-
mium, they would do the work, but it might not be necessary to pay
that much. They finally get to 30 per cent we will say. So that
the premium is not an amount that is given gratuitously in any sense
of the word. If the labor market should become glutted, it would be-
come quite possible that the premium would be lowered either by
reducing the day rate or by lowering the premium, so that that is a
matter that is decided according to experiment and law — this kind
of laws.
It has also been ascertained just how much a man can do in a day,
by experimenting with his strength; that is, by a load of, say, fifty
pounds. If a man would rest a certain portion of time in a day,
he would carry so much. By the system of experimenting with a
good strong man they could find out just what the maximum amount
SCIENTIFiC SHOP mAnAgEMENT 147
of the load was he could carry in a day. The idea would be to set that
as a day's work. In regard to wages, the amount of wages would be
set by what they could get the man to work for, by the law of supply
and demand.
We have figured out that if we are going to be reduced to a scientific
formula, so to speak, we are going to object that it is not to our
benefit to be thus experimented with. . . . We also protest against
it because apparently there is no place in scientific management for
collective bargaining, at least according to the statement of these
gentlemen some years ago. In this work written by Mr. Taylor, in
paragraphs Nos. 425 and 426 of his "Shop Management,"
The writer believes one way of regulating the wages and condition
of employment of whole classes of men by conference and agreement
between the leaders of unions and manufacturers to be vastly infe-
rior, both in its moral effect on the men and on the material interests
of both parties, to the plan of stimulating each workman's ambition by
paying him according to his individual worth, and without limiting
him to the rate of work or pay of the average of his class.
The amount of work which a man should do in a day, what con-
stitutes proper pay for his work, and the maximum number of hours
per day which a man should work together form the most important
elements which are discussed between workmen and their employers.
The writer has attempted to show that these matters can be much
better determined by the expert time student than by either the
union or a board of directors, and he firmly believes that in the
future scientific time-study will establish standards which will be
accepted as fair by both sides.
That is an indication to our minds that there is really no place in
scientific management for two people's opinions.
It has been stated that there is no opposition. As far as we can
ascertain from the workingman's point of View, there is nothing but
opposition to this system. We have been opposing it for a long time.
... It has been stated that these systems provide for higher rates
of pay for workmen. That is not literally true, according to the
testimony of these gentlemen. In paragraph No. 37 of this book on
"Shop Management"
By high wages he means wages which are high only with relation
to the average of the class to which the man belongs and which are
paid only to thosQ who do much more or better work than the average
148 TRADE UNIONISM AND lAbOR PROBLEMS
of their class. He would not for an instant advocate the use of
a high-priced tradesman to do the work which could be done by a
trained laborer or a lower-priced man.
The idea seems to be that the systematizing which is part of the
Taylor system will so simplify the work that where they had to have
a high-priced man before the system was introduced, afterwards they
could get along with a cheaper man. While the cheap man would
get a premium or a bonus for speeding up, he doesn't receive as much
as the man whom he displaces would be getting. That's the ideal
condition, according to what they advocate. That condition may not
have been achieved an3rwhere, but that is possibly due to the inability
of the managements to get the most out of the system that it is
possible to get out of it. That hasn't much to do with their inten-
tions, as we look at it. Their intentions are to get the most out of
the men for the least money. It 's the same as employers have ever
done. . . . This system may look to some people as a great boon.
It looks to the working people as the beginning of a new slavery, if
it is possible to enforce it, where we will have no opportunity to get
any satisfaction from our complaints. What satisfaction would a
workman get who went to the office and complained against the in-
justice of a stack of books like that ? He would not get any
consideration at all.
We can't see that this system has the ingenuity to change em-
ployers' sentiments.
Some people may wonder why we should object to a time study.
In the first place it is humiUating for a man to be suspected of
soldiering and loafing. One way is to hold a stop watch on him, so
that he doesn't cheat. That's not the principal objection. The ob-
jection is that in the past one of the means by which an employee has
been able to keep his head above water and prevent being oppressed
by the employer has been that the employer didn't know just exactly
what the employee could do. The only way that the workman has
been able to retain time enough in which to do the work with the
speed with which he thinks he ought to do it, has been to keep
the employer somewhat in ignorance of exactly the time needed. The
people of the United States have a right to say we want to work only
so fast. We don't want to work as fast as we are able to. We want
to work as fast as we think it's comfortable for us to work. We
SCIENTIFIC SHOP MANAGEMENT 149
haven't come into existence for the purpose of seeing how great a
task we can perform through a lifetime. We are trying to regulate
our work so as to make it an auxiliary to our lives and be benefited
thereby.
Most people walk to work in the morning, if it isn't too far. If
somebody should discover that they could run to work in one third
the time, they might have no objection to have that fact ascertained,
but if the man who ascertained it had the power to make them run,
they might object to having him find it out.
XII
THE PROBLEM OF LABOR TURNOVERS
THE typical handicraftsman of the Middle Ages pursued the same
trade all his life, with the exception of the Wander jahr, in the
same town. The Industrial Revolution has increased the mobility of
labor in at least four different ways : ( i ) In the movement between
countries. Individual migration as opposed to group migration has
been the characteristic since the Industrial Revolution. The growth
of America, Canada, and Australia during the nineteenth century was
made possible largely by the development of steam power. (2) In
the movement between different sections of the same country. The
American of today does not stay predominantly in the place of his
birth. He moves about from place to place. The Russell Sage
Foundation found that of 22,000 men investigated in seventy-eight
cities, only 16 per cent had been born in the city in which they
were then living.^ Of native-born Americans only one quarter were
living in the city of their birth. (3) In the rapid change of resi-
dence in any given locality. The modern worker, while in a town,
rarely lives long in any one apartment or house. He moves almost
unceasingly.. (4) In the frequent changing of positions. The work-
man may leave one plant to enter either another plant in the same
industry or one in a totally different industry.^ Recent studies have
shown how transitory the modern wage relation is and how tem-
porary is the occupancy of any particular position.
It is the purpose of this article to consider solely this rapid flux
from position to position, and to examine its nature, its extent, its
cost, and its causes and remedies.
iProm American Economic Review, Vol. VIII (1918), pp. 306-316; Vol. IX
(J919), pp. 402-40S.
^L. P. Ayres, Some Conditions Affecting Problems of Industrial Education
in Seventy-Eight American School Systems, p. 7.
^See Paul de Rousier's "The Labor Question in Britain," pp. 288 ff.
150
THE PROBLEM OF LABOR TURNOVER 151
L WHAT IS "LABOR TURNOVER"?
The term "labor turnover" has been given to this rapid change
from position to position. The size of the labor turnover depends
upon the proportion that the total number of employees hired during
a year bears to the size of the labor force that must be maintained.
To illustrate : a plant which employs 1000 men at the beginning and
end of a given year hires during that year another thousand. That
means that as many men have been newly hired as were employed at
the beginning of the year and that 2000 men have been employed
during the year to fill 1000 jobs. This is an excess of 1000 men over
what would have been needed had the original force stayed through
the year, and is reckoned as a 100 per cent labor turnover. Had only
500 new men been hired during the year, the turnover would have
been 50 per cent ; had 2000 men been hired it would have been
200 per cent.
II. METHODS OF COMPUTING LABOR TURNOVER
The recent discovery of the extent and costs of labor turnover has
brought with it varying methods of computation. In order that a
standard practice might be adopted, the National Association of
Employment Managers at their annual meeting in May, 1918,
adopted the following method,^ which has since been approved by
the United States Bureau of Labor Statistics as the basis for its inves-
tigations:^ "To compute the percentage of labor turnover for any
period, find the total separations for the period considered and divide
by the average of the number actually working each day through the
period."
iFor a full statement of this report see U.S. Bureau of Labor Statistics,
Monthly Review, Vol. VI, No. 6 (1918), pp. i72-i73- That this method did not
introduce uniformity may be seen from the symposium on labor turnover in
Industrial Management, September, 1918, pp. 239-246, and November, pp. 425-
426, in which from five to six different methods were advanced, practically all
of which, in the opinion of the author, are wrong.
2 See Boris Emmet, "Labor Turnover in Cleveland and Detroit," U.S.
Bureau of Labor Statistics, Monthly Labor Review, Vol. VIII, No. 1(1919),
pp. 11-30; Paul F. Brissenden, "Labor Turnover in the San Francisco Bay
Region," U.S. Bureau of Labor Statistics, Monthly Labor Review, Vol. VIII,
No. 2 (1919). PP- 4S-62-
152 TRADE UNIONISM AND LABOR PROBLEMS
Before criticizing this method it is necessary to determine just
what is meant by " turnover." Labor turnover is simply the number
of men hired by a given business unit to take the places of men
who have left. Turnover in this sense is exactly similar to the use
of the term by any retail merchant to indicate the disposal of
certain units and their replacement by other units.^ Turnover as
sUch does not begin until replacement occurs.
The percentage of labor turnover is the proportion which these
newly hired men who actually replace others form of the average
force employed in a given period of time. It indicates the percentage
of men which it has been necessary to hire in order to maintain a
constant labor force. In itself it indicates nothing as to whether the
force itself is being increased or decreased.
' In the light of this definition (which I believe would be ap-
proved by every student of the problem), the method of computa-
tion adopted by the Bureau of Labor Statistics is defective in the
following ways:
I. It uses separations rather than replacements as the basis of
turnover. The definition of turnover adopted by the Employment
Managers Association is indeed as follows: "Labor turnover for any
period consists of the number of separations from service during that
period. Separations include all quits, discharges, and lay-offs for
any reason whatsoever."
It is true that in a period in which the working force of the given
plant is being increased, separations do roughly constitute the amount
of turnover which takes place. Men are being hired not only to
increase the net working force but to take the place of those who
have left. It is only in the latter sense that they constitute replace-
ments and enter into turnover. Separations in this case, therefore,
do approximately measure replacements. To be absolutely accurate,
however, one should subtract the vacated positions which have not
been filled from the total separations to secure the number of actual
replacements. Such a deduction, however, although ideally necessary,
may not be practically possible in many instances, due to insufficient
pay-roll data.
nVith the exception, of course, that a high labor turnover means an eco-
nomic loss to the employer, while a high turnover of goods means an economic
gain to the merchant.
THE PROBLEM OF LABOR TURNOVER 153
But the case is different if the labor force is decreasing. Suppose
that a given plant decreases its force in a given period of time from
1000 to 900 and hires no new men. There are 100 separations, but
no new men have entered the plant. Turnover as such- has not oc-
curred. Yet the method adopted by the Bureau of Labor Statistics
would show a labor turnover of 100 men. Plainly, therefore, in this
case separations do not measure replacements. The number of men
newly hired do constitute replacements. It is not correct, moreover,
in the case of a declining labor force to deduct the positions vacated
but not replaced from the number newly hired, since those newly hired
have replaced some workers even if they have not replaced the
particular ones whose positions are vacated.
The proper method, therefore, of determining replacements should
take
a. The number of separations actually replaced as the base in
the case of an increasing force.
b. The number newly hired as the base in the case of a de-
creasing force.
2. It uses the average attendance as the denominator instead of
the number actually employed by the company. The best index of
the average number actually employed is not the average attendance
but the average number on the pay roll.^ The use of the average
attendance as the denominator confuses absenteeism with turnover.
Recent investigations show that from 6 to 15 per cent of the work-
ing force are absent daily. Yet these men fill positions which are
part of the working force, and consequently should not be disre-
garded in computing the average working force. Absenteeism should
be treated as a separate item in labor loss and not included in the
computation of turnover.^
1 Care should be taken that the pay roll does not contain " dead wood," or
men who have really left the employ of the company.
2 Mr. Boris Emmet, an investigator for the U.S. Bureau of Labor Statis-
tics, in his article on the "Nature and Computation of Labor Turnover," Jour-
nal of Political Economy (February, 1919), PP- 10S-117, has come to believe
in the use of hirings rather than separations in a decreasing work force, but
he still clings to the use of the average attendance as the denominator. One
of his objections to the use of the pay roll is that it contains absentees. Of
course it does, but these can be computed separately and should not be confused
with turnover.
154 TRADE UNIONISM AND LABOR PROBLEMS
The preceding paragraphs indicate the methods, which I believe
should be followed: To compute the percentage of labor turnover
for any period, find the total replacements for the period considered
and divide by the average number on the pay roll.
The difference between the method proposed by the author and
that adopted by the Bureau of Labor Statistics may be seen from
the following two nonalgebraic examples :
Example A. Computation of Labor Turnover with an Increasing
Labor Force
1. Given statistics :
Number employed at beginning of month, looo.
Number employed at end of month, iioo.
Number newly hired, 300.
Number positions vacated not filled, i o.
Average daily attendance, goo.
2. Method of Bureau of Labor Statistics :
Number of separations = 300 — (i 100 — 1000) = 200.
Labor turnover = |§J = 22.2 per cent.
3. Method proposed :
. , ,, 1000+ 1 100 ,
Average force on pay roll = = 1050.1
2
Number of replacements = 300 — (i 100 — 1000) — 10 = 190.
Labor turnover = xWsi or 18.1 per cent.
Percentage of absenteeism = iV/^ = i4-3 per cent.
Example B. Computation of Labor Turnover with a Decreasing
Labor Force
1. Givfen statistics :
Number on pay roll at beginning of month, 1000.
Number on pay roll at end of month, 900.
Number newly hired, 25.
Average daily attendance, 800.
2. Method of Bureau of Labor Statistics :
Number of separations = 25 + (1000 — 900) = 125.
Labor turnover = ^§§, or 15.6 per cent.
'^That is, the arithmetic average of the number employed at the beginning
and end of the month. The number each week can be averaged if more accurate
methods are desired. '
THE PROBLEM OF LABOR TURNOVER 155
3. Method proposed :
Average number on pay roll = — = 950.
Number of replacements = 25.
Labor turnover = ^^, or 2.6 per cent.
Percentage of absenteeism = — , or i c.8 per cent
950 ^
It will be noticed that the use of this method results in a much
lower turnover rate, which is especially true in the case of a decreasing
labor force.
The labor turnover for a given period should be reduced to a
yearly basis in the same fashion that the Public Health Service re-
duces mortality and morbidity statistics to a yearly rate. If the
given period is a month, the percentage should be multiplied by 12 ;
if a week, by 52. Care should be taken (i) that the replacements
listed should not include former employees newly hired for their
old positions; (2) that the statistics be compiled for departments
and trades as well as for the plant as a whole.
It is quite clear that some labor turnover is inevitable. Men
who die or fall sick or are injured must be replaced. Since the men
and women in industry are predominantly in those age groups
where mortality is lowest, it is extremely probable that the death rate
does not greatly exceed 10 per 1000, or i per cent. Sydenstricker
and Warren estimate that the American wage-earner loses on an aver-
age about nine days a year because of sickness alone.^ On a basis of
300 working days during the year, this would be an average loss of
3 per cent of the working time. But a corresponding 3 per cent
labor turnover does not necessarily follow, because illness that is
only of short duration does not occasion replacement. Industrial
accidents furnish another small source of the labor turnover. Non-
fatal accidents may necessitate a replacement of from i per cent to
2 per cent. However, taken all together, these causes would not be
responsible for a turnover of more than 5 or 6 per cent.
'^B. S. Warren and Edgar Sydenstricker, "Health Insurance, its Relation
to the Public Health," Public Health BuIIetm No. 76, p. 6. See also American
Labor Legislation Review, Vol. VI, p. iS6, which gives studies of Rochester,
N. Y., and Trenton, N.J., that bear out Warren and Sydenstricker's estimate.
IS6 TRADE UNIONISM AND LABOR PROBLEMS
III. THE AMOUNT OF THE LABOR TURNOVER
No complete survey of the amount of labor turnover in plants
throughout the country is as yet forthcoming. The Bureau of Labor
Statistics has been investigating this problem for over two years,
but the results of their research have not yet been made public.
Several studies of typical plants in different sections of the country,
however, afford a bird's-eye view of the actual situation.
Mr. W. A. Grieves, of the Jeffrey Manufacturing Company, in
December, 1914, made the first detailed analysis of the extent of
the labor turnover. Mr. Grieves obtained the employment figures of
twenty metal plants in the Middle West and found that to maintain
an average of 44,000 hands during the year they were compelled
to hire a total of 69,000. The labor turnover for these plants was
consequently 157 per cent for the year.^
Mr. Magnus Alexander, of the General Electric Company, pub-
lished a study on this subject in 1915. After an investigation of the
employment records for 19 12 of twelve metal-manufacturing plants
in six states, he found that this group, which employed 37,274 work-
men at the beginning and 43,971 at the end of the year, had hired
during that year 42,571 new employees.^ Deducting the net in-
crease of 6697 in the working force, there were 35,874 replacements
during that year. Using the number employed at the end of the
year as a base, this would be a labor turnover of 82 per cent. Sup-
posing that the increase had been evenly distributed throughout the
year, and using 40,623 as a base, the turnover for these plants would
be 88 per cent.
Mr. Boyd Fisher, after analyzing the employment figures for the
last year in fifty-seven Detroit plants, found that the average turn-
over for the group was 252 per cent.^ The Ford Motor Company
from October, 191 2, to October, 19 13, hired 54,000 men to maintain
an average working force of 13,000. This was a labor turnover of
iW. A. Grieves, The Handling of Men (published by the Executives' Club,
Detroit Chamber of Commerce), p. 3.
2 Magnus W. Alexander, "Hiring and Firing, the Economic Waste and How
to Avoid it," American Industries, August, 191S, p. 18.
'Boyd Fisher, "How to Reduce the Labor Turnover," Annals of the Amer-
ican Academy, Vol. LXXI, p. 14.
THE PROBLEM OF LABOR TURNOVER 157
416 per cent for the year/ The figures from other plants are almost
equally striking. A large Philadelphia concern had a labor turnover
of 100 per cent in 19 n.^ The turnover of the Plimpton Press was
186 per cent in 1912.= The Pacific Telephone and Telegraph Com-
pany, of Portland, Oregon, hired 202 new girls in three months to
maintain an average force of 700. If this is typical of the year, the
turnover was 115. per cent. Mr. Gregg has stated that the turnover
of the carding department of a certain cotton mill was over 500
per cent for one year.* Representatives of the Goodrich Tire and
Rubber Company have declared that their turnover in former years
was nearly 200 per cent and that for the last year it has been
even higher ! ^
The turnover for juvenile labor is especially high. The Board of
Education of Rochester, New York, found that boys between the
ages of fourteen and sixteen changed their jobs, on the average, every
seventeen weeks.^ This is a turnover for juvenile labor of over
300 per cent. The employment records of Swift and Company of
Chicago show that the average term of employment for a boy in
their service was only three and a half months.^ This means that
nearly three boys and a half are employed every year for each
position or, to be accurate, that there is a labor turnover of 342
per cent. Figures from Indianapolis, Indiana, show that of 6710
jobs held by children leaving school 7 per cent were for less than
two weeks ; 15 per cent for less than a month ; 30 per cent for less
than two months; and 48 per cent, or practically one half, for
less than three months.^
1 Boyd Fisher, " Methods of Redudng the Labor Turnover," U. S. Bureau of
Labor Statistics, Bulletin No. 227 (191 7).
2 J. H. Willetts, "Steady Employment," supplement to the Annals, Vol,
LXV, p. 70.
3 Jane C. Williams, "The Reduction of the Turnover of the Plimpton Press,"
Annals, Vol. LXXI, p. 80.
*R. C. Gregg, "A Method of Handling the Problem of Labor Turnover,"
Textile World Journal, April 28, 191 7.
5 John A. Fitch, "Making the Boss EfQcient," The Survey, Vol. XXXVIII,
p. 211.
8 Fifty-sixth Annual Report of the Board of Education, Rochester, N.Y.,
p. 142.
^National Association of Corporation Schools, April, 1916, p. 13.
"Adapted from figures given in Indianapolis Vocational Survey, Bulletin
No. 21, Vol. I, p. 119-
IS8 .TRADE UNIONISM AND LABOR PROBLEMS
The figures for manufacturing indicate, therefore, that the turn-
over for this branch of industry is extremely high. Mr. Ernest M.
Hopkins, who has had a great deal of experience as an employment
manager for several large industrial concerns, has said that a con-
servative estimate for many industries would be loo per cent.^
Mr. Ethelbert Stewart, who was in charge of the field work for the
Bureau of Labor Statistics, has stated that some firms have as high
a turnover as 400 per cent.'
The turnover in many branches of agricultural and construction
work is even greater. Professor Carleton Parker, in a most inter-
esting study of casual labor on the Pacific coast, cites a dried-fruit
farm in California that had a monthly turnover of 176 per cent ; a
construction job in the Sierras, with a normal force of 950 men, which
had a monthly turnover of 158 per cent; and a ranch with a nine
weeks' fruit season which had a monthly turnover of 245 per cent.^
After a careful investigation he concluded that the average duration
of a job in certain kinds of work was as follows :*
Days
Lumber camps 15-30
Construction work 10
Harvesting 7
Mining 60
Canning 30
Orchard work 7-10
IV. THE COST OF THE LABOR TURNOVER
A high labor turnover is not always an economic waste to the
employer. A plant with many rush orders paying high wages may
find it to its economic interest to drive its workmen at such a pace
that they will be exhausted at the end of a few months. The old
group of workmen can then be discharged and a new group employed.
Many munition factories in the United States followed such a policy
during the years 1915 and 1916. Though this is of course poor
economy from the standpoint of social efficiency, and has beAi so
1 Proceedings, Third Annual Convention, National Association of Corporation
Schools, p. 738.
2 Bureau of Labor Statistics, Bulletin No. 202, p. 8.
8 Carleton H. Parker, "The California Casual and his Revolt," Quarterly
Journal of Economics, Vol. XXX (1915), p. 121. ^Ibid.p. 122.
THE PROBLEM OF LABOR TURNOVER 159
recognized in both England and America under the stress of war,
yet it may well have been a paying policy for many firms.
As a rule, however, the employer suffers a very real economic
loss from a high turnover. Although it is impossible to obtain
exact figures on the cost of the excessive hiring and firing, careful esti-
mates are fortunately available. The principal items that enter
into the cost of employing new men are
1. The clerical cost of hiring and firing. This includes the time
of the official (generally the overseer) who discharges the old worker
and employs the new, plus the time spent on the additional pay roll
and other records.
2. The cost of the instruction given the new employees by the
foremen and the assistants. Even if the workman is experienced,
considerable time must be spent in explaining the details peculiar
to that particular plant. The cost of training a worker for a skilled
or semiskilled position is much larger still.
3. Decreased production by the new worker before coming up to
full working capacity. It takes time to "warm up" to one's work
and reach the maximum of efficiency. Rapid shifting of men per-
petuates this period of novitiation with its greatly diminished
productivity.
4. Breakage and damage caused by the new man. This includes
(c) the actual breakage of a machine or tool ; (b) the stoppage of a
machine, or the delay of work ; (c) accidents to the workers, for
which the employer is liable under workmen's compensation laws ;
{d) the wasting or destruction of material upon which the new
worker is employed.
5. The cost of idle machinery and equipment where the old posi-
tion is not immediately filled.
The cost per man naturally varies with the type of worker. Alex-
ander classifies the employees under five heads :
A. Highly skilled mechanics who have spent years in attaining
their present proficiency.
B. Mechanics of lesser skill who secured their training in a
year or two.
C. Operatives who, without previous experience, can acquire
a fair degree of efficiency within a few months.
D. Unskilled laborers needing practically no training.
i6o TRADE UNIONISM AND LABOR PROBLEMS
E. The clerical force.
His careful estimate of the expense per man for the various groups
is as follows : ^
A $48.00
B 58-50
C . . ■ 73-5°
D 8.50
E ■ 29.00
This is of course only an estimate, although a very careful one.
Mr. Grieves estimated that the per capita cost averaged at least
$40.^ Mr. John M. Williams, of the Fayette R. Plumb Company of
Philadelphia, a tool-making concern, states that ."the final cost per
experienced man is over $100."^
Mr. Alexander estimated that the annual unnecessary expense for
the twelve factories that he covered was between $830,000 and
$1,000,000. If Mr. Grieves's estimate of an average cost of $40 is
used, the total yearly loss for the twenty firms which he investigated
was $1,760,000, or an average of $88,000 per firm. The yearly cost
to the Ford Motor Company for its 416 per cent turnover was over
$2,000,000. Since these are figures for only a few plants, the annual
cost for the country as a whole must be tremendous. A most
conservative estimate would be between one and two hundred millions.
V. CAUSES AND REMEDIES OF THE LABOR TURNOVER
This excessive shifting from position to position clearly demon-
strates that something is wrong with industry. In diagnosing its
causes we are at the same time enabled to suggest certain remedies
that may lessen it.
Some of the more prominent causes are
I. Poor methods of employment and discharge. Men are gen-
erally hired en masse, with little regard to their qualifications, and
fired summarily if they do not make good on the jobs upon which
they are tried out. The power of employment and discharge is
^Alexander, op. cit., pp. 20-21.
^W. A. Grieves, op. cit., p. j.
3 John M. Williams,- " An Actual Account of what we have done to Reduce
our Labor Turnover," Annals, Vol. LXXI, p. 54.
THE PROBLEM OF LABOR TURNOVER i6i
generally vested in the foreman of each department. These men are
rarely skilled in the tactful handling and judging of men.
2. Poor methods of promotion within the factory. Work in one
position rarely leads to a higher position. The workman in any
particular plant relies therefore upon a change to some other plant
to better his status.
3. The seasonal nature of many industries. The turnover is
necessarily large where the volume of output is not evenly distrib-
uted over the year. After the "peak" has been passed, many
workmen must be laid off. If the peak reoccurs within a few months,
a new force must be employed. Positions of short duration, spelling
a high turnover, are the inevitable concomitants of seasonal industry,
4. Juvenile labor. Children rarely stay long in one position.
The fourteen- to sixteen-year-old child is restless and wants to move
about. A regular, settled employment rarely satisfies him.
5. The monotony of modern factory labor. This is rarely men-
tioned as a cause of labor turnover, but on a priori grounds we must
infer that it exercises tremendous influence. Specialization and
routine labor have rendered industry so dull that it is no wonder
the modern artisan frequently throws up his job and seeks another
plant from sheer weariness.
6. Low wages. A plant that pays low wages cannot hold men
long. They regard the job as a makeshift and will leave it as soon
as they can find another.
Thus some of the causes of this newly discovered phenomenon are
long-recognized evils, while some have been but newly brought to
light. The remedy most frequently proposed by students of the sit-
uation is the installation of a specialized employment department to
have complete charge of the hiring, handling, and firing of men.
In most factories the task of employment and the discharge of men
is confided to the foremen of the' various departments. Hands are
both hired and fired in a hit-or-miss fashion. Many firms keep no
employment records at all, and most of those that do keep such
records have only scanty material. They seldom ask the reasons for
the workman's leaving, nor do they measure the turnover depart-
ment by department. The centralization of employment and dis-
charge and the concentration of responsibility would permit the use'
of scientific methods.
l62 TRADE UNIONISM AND LABOR PROBLEMS
Such a department could lessen the turnover in the following ways :
1. By the use of a better method of selecting employees. Physi-
cal tests would eliminate a considerable number that are now em-
ployed only to be shortly discharged. Though mental tests h'ave not
developed as yet so far as to make it possible to assign men to the
particular jobs for which they are best adapted, at ledst those
mentally incompetent for industry could be eliminated. The various
jobs in the plant could, moreover, be analyzed in respect to the
amount of skill and intelligence required of the operative. The
workers could then be divided into rough groups according to their
previous training and innate mental ability and assigned to the
corresponding grade of work. A centralized personnel department
could follow up and verify work references and thereby classify
workers on the basis of past experience. And it could maintain a
waiting list, so that when new men were needed they could be chosen
largely from men about whom something was known instead of, as
now, being picked up off the streets.
2. By a system of follow-up work for the new employees. This
would include taking them to their place of work and indicating a
friendly interest towards them. The training should be given prefer-
ably by special instructors and not confided to the foremen. In
many cases it is best to give the new men preliminary training be-
fore they are actually placed in any department. Moreover, the
working conditions should be closely watched by the personnel
department in order to insure proper ventilation, lighting, the pre-
vention of dust, and the lessening of fire and accident risks. To
keep a record of absences, classified by individuals and by causes,
would also be a legitimate task for such a department.
3. By an investigation of the reasons for the successes and fail-
ures of individual workmen. The method commonly employed is to
discharge a workman if he fails to make good on a particular job.
This involves a great waste. A workman may fail on a specific job
and yet be a valuable man for the concern. It may be that the
antagonistic attitude of the foreman or the men is such that he can-
not do himself justice. It may be that he is ill-adapted to that partic-
ular position but would be perfectly competent in a position in some
other department. The worker embodies a considerable investment
of capital by the employer and is worthy of at least another trial
THE PROBLEM OF LABOR TURNOVER 163
before he is discharged. The personnel department can find out the
reasons for his lack of success and act accordingly.
Should the worker succeed in a given position he should be com-
mended and assured promotion. A well-defined promotion policy-
would indeed save many a plant a great deal of dissatisfaction and
lessened efficiency. The efficiency of the plant and the loyalty of
the workers may be further heightened by the institution of dis-
cussion groups at which plant problems can be explained and work-
men's ideas solicited. This will also serve to bring to light hidden
talent which could be utilized in executive work.
The creation of such a personnel department, charged with these
functions, is but the logical extension to the human side of industry
of the scientific principles that have hitherto been employed on the
mechanical side. It merely strips the department foreman of his
employment functions and enables him to concentrate his attention
upon the actual production of goods. With this splitting of the task
greater specialization and efficiency can result. The centralized em-
ployment department has been tried in many plants and, on the
whole, has been very successful.^ Some illustrations of its success
are (i) the reduction by the Dennison Manufacturing Company of
its turnover from 68 per cent to 37 per cent a year ; (2 ) the reduction
of the turnover by the Joseph and Feiss Company of Cleveland, Ohio,
to one third its former amount 1(3) the lowering of the Plimpton Press
turnover till it is now only 10 per cent a year ; (4) the decrease in the
Ford turnover from 416 per cent to less than 80 per cent. Other fac-
tors besides that of the creation of such a department contribute to the
marked decrease in three of these plants. Forms of profit-sharing were
introduced into the Dennison and Ford companies, while the Dennison
and Feiss plants also succeeded in regularizing their output.^
1 There are probably over 500 employment managers in the United States
as a whole. The following cities have local associations of employment man-
agers: Boston, Chicago, Cleveland, Detroit, Newark, New York, Philadelphia,
Pittsburgh, Rochester, and San Francisco. The following are among the large
concerns to have special employment departments : Sears, Roebuck & Co. ;
Marshall Field & Co.; Armour & Co.; Packard Motor Car Co.; Ford Motor
Co. ; Equitable Life Insurance Co. ; R. H. Macy & Co. ; American Tel. & Tel. ;
Curtis Pub. Co.; John B. Stetson Co.; Westinghouse Electric Co.; Eastman
Kodak Co.; Dennison Mfg. Co.; Cheney Bros. See J. H. Willetts, "Develop-
ment of Employment Managers' Associations," U.S. Bureau of Labor Statistics,
Monthly Review, Vol. V, No. 3 (1917), PP- 85-87. ^Gregg, op. cit.
1 64 TRADE UNIONISM AND LABOR PROBLEMS
Small concerns would probably not find it profitable to create
a special personnel department. Consequently this is one of the
advantages of large-scale production. Whether there is a greater
turnover in the larger plants which will offset this advantage is a
question that cannot be answered at present.
Profit-sharing is another method of insuring greater permanence
of labor. Mr. Boris Emmet, who investigated profit-sharing schemes
for the Bureau of Labor Statistics, says, "All the informants, with-
out exception, were also of the opinion that the establishment of the
plans has a tendency to reduce the percentage turnover of their
working organization."^
In so far as the labor turnover is caused by the seasonal nature
of industry the creation of a specialized employment department
would offer no remedy. Once the cost of labor turnover is recognized,
the employers will see that the regularization of industry and the
smoothing of the peaks of production will be economically bene-
ficial to them. The efforts of the Clothcraft Shops of Cleveland
and the Dennison Manufacturing Company have been turned espe-
cially in this direction.
The large turnover of children between fourteen and sixteen is
merely another proof -of the economic and social wastefulness of this
class of labor. Industry and society would be much better off were
the age of entrance into industry raised generally from fourteen to
sixteen years. In so far as the labor turnover is due to the monotony
of machine labor, few remedies within the plant can be devised. The
men, to be sure, can be transferred from one machine to another.^
But this is about all. The balking of man's innate tendency towards
contrivance seems to be an inevitable consequence of the machine
era. New avenues must be opened, outside of industry, for its
legitimate expression.
Whatever may be the final steps taken to solve this problem, its
recognition signalizes a marked advance in the^ development of
human engineering.
Paul H. Douglas
U. S. Emergency Fleet Corporation
1" Profit-sharing in the United States," U.S. Bureau of Labor Statistics,
Bulletin No. 208 (1917).
2 Mr. Dennison does this in his factory.
XIII
PERSONAL RELATIONSHIP AS A BASIS OF
SCIENTIFIC MANAGEMENT'
GIVEN two establishments in the same industry, in the same local-
ity, build for them the same buildings, equip them with the same
machinery, and establish for them similar methods of handling
equipment and materials — yet, in the course of a short time, there
will be a difference in both the quantity and the quality of their out-
put. This difference in result will be caused by the difference between
the two in the quality of their personnel. For this reason alone
the question of personnel must ultimately be considered the real
problem of management.
If one of the above plants were headed by a management of
the ordinary or traditional type and the other by a management
which fully realized the importance of personnel and had devel-
oped an active philosophy tending toward the solution of the per-
sonal problem, the difference in practical results would be so
great as to be unbelievable by the uninitiated. In fact, this differ-
ence alone would often spell failure in the one case and success in
the other.
The managers of both plants would see the shortsightedness of
letting buildings and other equipment run down for lack of upkeep
and repair. Both would see the value of and put into practice means
for running the machinery at the most efficient speeds and bringing
into use the best tools and the best method of handling material.
It would be taken for granted by both that anything that goes to the
improvement and upkeep of these things would be a necessary ex-
penditure or a wise investment. The ordinary management, how-
ever, would not think of applying the same laws of upkeep and
improvement to the personal equipment. . . .
iprom address before Society to Promote the Science of Management.
Taylor Society Bulletin, November, igiS.
i6s
i66 TRADE UNIONISM AND LABOR PROBLEMS
Only actual comparison of the mechanical and other developments
in this establishment with those in the next best establishment in the
men's clothing industry would suffice to prove this point. The in-
dustry generally is not in a very advanced state. The usual type of
management is at the best only beginning to realize the existence of
the personal side. As a result, machinery and equipment are almost
universally limited to a few undeveloped or semideveloped types,
regardless of whether or not they are most suitable for the purpose
in the hands of the individual operator. In practically all these fac-
tories you will find only a few types of machines, and these set up
and equipped as they come from the manufacturers and running at
haphazard speeds. Shears and all other tools are any which the em-
ployee chooses to furnish for himself.
In the Clothcraft Shops, working from the personal point of view,
not only are tools developed and prescribed with regard to their suit-
ability for the purpose of individual accomplishment, but all tools
are furnished and maintained by the management. Fully 50 per
cent of the different types of machines in use at the Clothcraft Shops
are not, as far as is known, used in any other establishment in the
industry, and practically every machine in use has been developed
so as to be specially adapted for its particular purpose in the hands
of the individual who uses it. In like manner the proper handling
of materials and the installation of other methods developed under
scientific management have been introduced in this establishment as
necessary steps in the development of the highest efficiency of the
individual. ...
All responsibilities of the management in the direction of personal
service, directed toward the welfare and development of the indi-
vidual, are part of the function of employment. For the purpose of
administering this function the Clothcraft Shops of The Joseph and
Feiss Company have established an Employment and Service De-
partment. In this organization this department is considered one of
the most important adjuncts to the management.
While, as mentioned above, hiring is only a small part of the
function of employment, nevertheless, the solution of the problem
of selection is of great importance in its bearing on the whole
future development of the worker. All applicants for positions are
interviewed by one of the heads of the Employment and Service
PERSONAL RELATIONSHIP 167
Department of the Clothcraft Shops. Certain specific information
concerning the applicant is obtained in every case and entered on
a blank for the purpose. Information deemed essential consists of :
Name and address.
Date of application.
Date and place of birth.
Date of immigration^ if foreign bom.
Parentage.
Languages spoken.
Education,
Whether married or single.
Number in family.
Wage contribution to family support.
Record of previous employment.
The idea should' be to keep such records as simple as possible —
only the important details being entered.
Languages spoken may be important in many organizations for
various reasons. In this establishment English-speaking applicants
are given preference. In case employment should be given to an ap-
plicant who does not understand English, the applicant must agree
to attend one of the classes in English.which are held at the factory.
The Board of Education of the city of Cleveland has cooperated
by furnishing teachers and textbooks for these classes. Where appli-
cants do not speak the English language it has often been found
that their residence in the coimtry, and, consequently, their employ-
ment, is considered merely temporary by them. In the case of those
who do not speak the English language it has been found very diffi-
pult to impart instructions and to obtain proper standards of out-
put and quality. Of thirty-five employees (out of a total of nearly
800) who have not sufficient knowledge of English to understand
instructions thoroughly only one has reached efficiency equal to that
of the best doing the same kind of work. Eight of this number have
reached efficiency equal to less than the average, and the remaining
twenty-six are the least efficient at their respective operations. More-
over, people who cannot speak the same language cannot under-
stand each other thoroughly, and therefore can never attain that
State of friendly feeling which is the basis of cooperation and spirit.
1 68 TRADE UNIONISM AND LABOR PROBLEMS
The matter of wage contribution is important. Other things being
equal, preference should be given to those who have to support
themselves or whose contribution to the family income is a necessity.
The custom of contributing the entire earnings to the family income
is often an important element in inefficiency, especially where the
contribution is in whole or in part unnecessary. Younger women
who live at home are often required to turn over the entire contents
of their pay envelopes to the head of the family, even where such a
contribution is not necessary. By depriving the worker of the use
of his earnings, the incentive toward efficiency is removed and ambi-
tion destroyed. Cases of this kind are being constantly handled by
the Employment and Service Department. A home visit by one of the
staff has always resulted in an agreement being reached with the
parents by which a stipulated sum was paid into the family ex-
chequer and the remainder of the earnings kept by the employee in
question and deposited in the Clothcraft Penny Bank. Such an
arrangement has always proved beneficial and has developed an in-
crease of efficiency ranging from 20 per cent upward. A case in
point is that of Tillie B., who had been the subject of a great deal
of attention over a long period of time for the purpose of increasing
her earnings, which averaged 13 cents per hour. After an arrange-
ment such as mentioned above had been made, Tillie's earnings im-
mediately jumped and soon reached 22 cents an hour, which she
held until she left the organization to be married.
Information as to past employment is important as a record of
experience and earnings. The number of positions held is also an
indication as to whether or not the applicant is a floater. For pur-
poses of reference this information is of little or no value and is
never used at the Clothcraft Shops. Wherever possible, however,
applicants give as their references members of the Clothcraft organi-
zation. This tends to keep alive in the organization an active interest
in the kind of new employees. It is, moreover, a good indication of
the applicant's character, since although a person cannot always be
judged by his family, he can generally be judged by his friends.
The interviewing of applicants is important and requires consid-
erable tact, judgment, and experience. Ample space should be left
on every application form for making notes as to the individual's
special qualifications as well as any other circumstances surrounding
PERSONAL RELATIONSHIP 169
the case. As judgment is essential, and as judgment is influenced
by immediate impression, in this establishment no one is employed
on the date of appUcation. Postponement of selection tends to bring
all applicants in their proper relationship in the mind of one who
has the responsibility of their selection. This method, moreover,
tends to reduce the number of floaters who otherwise might get on
the pay roll.
Application records are classified as to sex, age, and apparent suit-
ability. When a position is to be filled,- one or more applicants are
sent for. A definite time is set for their appearance, and self-addressed
postal cards are inclosed to be mailed in case appointments cannot be
kept. At this time selection is made for immediate employment, and
the fitness of the applicant is more definitely determined.
As a rule, in industrial establishments, where the question arises at
all, only fitness for the work is considered. There are, however, two
kinds of fitness to be considered, provided a person is suited for
industry at all ; one is fitness for the position ; the other is fitness
for the organization. Of these the latter is by far the more important.
Fitness for the organization is chiefly a question of character.
Every organization has a distinct character of its own, which is often
recognized as being a tangible business asset. It is essential, there-
fore, that every member of the organization have a character suffi-
ciently developed or capable of development to be in harmony with
the character of the organization. This is the basis of esprit de corps.
No matter how skilled or fitted one may be to do a given piece of
work, if he is out of harmony with the spirit or character of the
organization, he will be an everlasting detriment to himself and all
others in the organization who come in contact with him.
The interview of the applicant by a trained head of the Employ-
ment and Service Department is the basis of predetermining as far
as possible both the fitness for a position and for the organization.
In judging fitness for a position, past experience, where there is any,
is sonietimes a guide. At the best, however, it is a guide of only
doubtful value. Personal choice also can be taken in some instances
as a guide. This predilection furnishes in itself a valuable incentive.
Often, however, it is a case of bringing the child up on candy because
he likes it. When considered at all, it is important to weigh care-
fully all the reasons for the predilection.
170 TRADE UNIONISM AND LABOR PROBLEMS
The applicant's fitness for the organization, while more important,
is more readily predetermined, by interview. The interview at the
time of employment is very thorough and designed to explain to the
prospective employee the character of the organization and its poli-
cies, and the responsibilities of the organization to the employee as
well as the responsibility of the employee to the organization.
As the aim of the Employment and Service Department is to
keep every position in the organization filled with fit men and women,
the question of physical and mental fitness of the individual is of
prime importajice. For the physical needs at the Clothcraft Shops
a complete medical department is maintained as part of the Employ-
ment and Service Department. A graduate nurse is in direct charge
of this work. The equipment includes a dispensary, separate rest
rooms, a waiting room, and a consultation room for the factory physi-
cians. The medical staff consists of a physician, an oculist, and a
dentist. The physician is at the factory three mornings a week, the
oculist two mornings, and the dentist one morning. All medical
work done at the factory is paid for by the company. Outside serv-
ice of the factory physician is furnished to employees and their
families at special rates, except in instances where the Employment
and Service Department recommends treatment at the company's
expense. In order to facilitate physical examinations required, the
time of taking on new employees is being regulated so as to coincide
with the time that the physician spends at the factory. Physical
examinations of all members of the organization are repeated an-
nually or with greater frequency if there is cause.
The eye examination is of the greatest importance in considering
applicants for certain positions. A preliminary examination is made
by the nurse in order to discover any obvious defects of vision. Ar-
rangements have been made by which, in case the oculist later pre-
scribes glasses, they can be procured from a first-class optician at
half the regular price. One of the greatest obstacles in connection
with this work is the fact that many people who are in need of
proper glasses have had glasses supplied to them by optical stores
or by itinerant vendors without the advice of a practicing oculist.
In most cases the trouble has only been aggravated. The benefits of
an eye examination and the prescribing of proper glasses are readily
apparent.- In one case a young woman had worn the same glasses
PERSONAL RELATIONSHIP 171
for a number of years. She had obtained them from a dealer whose
business enterprise included the sale of glasses a,nd jewelry. The
young woman realized thoroughly that her eyesight was poor and
complained constantly of eyestrain and headaches. She was an
employee of the firm for a number of years and had always been
more or less inefficient. Examination of her eyes by the factory
oculist proved not only that her eyesight was very poor but that the
glasses which she had been wearing for six years were fitted with
nothing but plain window glass. Fitting her with proper glasses not
only entirely eliminated the headaches, but, within a period of a
few weeks, resulted in an increase in efficiency to a standard equal
to the best. . . .
Accidents are not of the major kind in the clothing industry,
and even minor accidents have been practically eliminated at the
Clothcraft Shops by a thorough system of safety devices and in-
struction. There are naturally, however, a number of cases where
fingers are pricked in handling needles or where other minor injuries
are incurred either away from or at work. Ordinarily these things
are neglected and cause a great deal of inconvenience and much loss
of time due to infections. Instructions are given that no one should
be permitted to work with the slightest scratch or the slightest ache
or pain, or any indication whatever of illness, without consulting the
nurse. This has not only cut down the time lost from infections to
almost nil but has also made it possible to forestall a great number
of incipient cases of illness. This precautionary measure, together
with the medical work in general, has undoubtedly been the means
of keeping the working force of the Clothcraft Shops absolutely
free from all epidemics that have swept through the community in
the past few years.
Only one who has gone deeply into the question of health in its
relation to efficiency can realize the loss occasioned by lack of knowl-
edge and attention to even the simplest rules of hygiene. A great
deal of work is constantly required to educate people to realize the
necessity of fresh air, proper diet, and regular hours, lack of atten-
tion to one or all of which is often the cause of inefficiency. What
can be done by working along these lines is well illustrated by the
following cases. At the time medical examinations were first installed
at the Clothcraft Shops five young women were selected, all having
172 TRADE UNIONISM AND LABOR PROBLEMS
been on the same operation from one to six years. These five had a
record for absence, tardiness, and general inefficiency much worse
than any of the other forty or fifty on the same operation. It was
found that all five were accustomed to sleeping with windows closed
at jnight and took no outdoor exercise at any time. All neglected the
simple rules of diet, and two were accustomed to hurry away from
home every morning without breakfast. One was found to be in
need of eyeglasses. All complained of not feeling fit when they
came to work in the morning and complained constantly of head-
aches and a general debility, which naturally resulted in much
absence from work. The cases were interviewed separately, proper
advice was given, and the ultimate results of irregularity and in-
efficiency were thoroughly gone into. By consistent follow-up the
advice was soon accepted by all, with the result that tardiness and
absence were practically eliminated in all cases, and efficiency was
increased from 20 to 50 per cent.
One phase of this work' is worthy of special mention. No one who
has ever been in actual touch with the men and women of an in-
dustrial organization has failed to run across the case of the man
who is down and out because of long sickness in his family. Doctor's
bills and bills for medicines are rapidly getting him deeper and
deeper in debt, or he may be brooding over what he thinks to be the
last lingering illness of one of his family. A man with a load such
as this can seldom hold up his end in either output or quality. In
the vast number of cases an investigation will show that his troubles
can easily be alleviated. He is often the prey ~ of an unscrupulous
practitioner or some fraudulent fake who is bleeding the family for
every cent that it can scrape together. Very often the family is
despairing of medical assistance and is found to be squandering a
large portion of its income on fake remedies at the instigation of the
ignorant advice of neighbors or under the influence of the advertis-
ing carried in unscrupulous newspapers. The prevalence of these
conditions is of such amazing extent as to cry for public atten-
tion. Unfortunately medical ethics seems too unethical to deal with
the situation. By reason of its far-reaching effect, the handling
and prevention of such cases must be considered one of the im-
portant accomplishments of the medical service of the Clothcraft
Shops. . . .
PERSONAL RELATIONSHIP 173
A great deal has been said and written about psychological tests
for the purpose of selection, but the little that has been done of
practical value has been limited almost entirely to a few tests for
special aptitudes where special aptitudes are required. For the pres-
ent, at least, such tests, even when practically developed, can be
used only for the determination of individual limitations. At the
Clothcraft Shops investigations and experiments have been carried
on for this purpose. The tests that are -being developed consist of
general-intelligence tests, including a test for ability to follow in-
'structions and a series of tests for dexterity. Professor Walter Dill
Scott of Northwestern University has been retained for the purpose
of assisting in the development of these tests. Recently a series of
tests were given under his direction with the assistance of Professor
Henry A. Seager of Columbia University. Twenty-one subjects were
chosen for the purpose and included members of the organization
holding executive positions and operatives of different degrees of
efficiency in various kinds of work. In practically every case the
results of the tests checked up accurately with the estimate of general
intelligence and dexterity based on records and personal acquaintance
over a long period of time.
The object of these tests is twofold. In the first place, with the
best of care errors are bound to occur in original selection and
placement. People are often placed on work for which they are not
at all suited, and some are occasionally selected who are mentally
unfit for the industry. This under no circumstances means that all
the mentally deficient are unfit. There are, of course, all kinds of^
mental deficients, and there are a great many different kinds of work
in most industrial establishments that can be done as efficiently by
the mentally subnormal as by the normal. The human make-up
is so complex that many instances have been found where a normal
individual was incapable of reaching the same efficiency in certain
kinds of work as a subnormal had reached.
Several cases were taken at the Clothcraft Shops of people who
were apparently deficient mentally. A series of tests was made by
the Binet method in order to confirm this conviction and in order to
get an approximate rating of their mental capacity. In most instances
one who has not had intimate acquaintance with individual cases over
a long period of time would not suspect any mental deficiency. A
174 TRADE UNIONISM AND LABOR PROBLEMS
case in point is that of a girl who had been in the employ of the
firm for about four years. Being employed rather young, she was
put on an operation of the simplest kind. While on this operation
she became very efficient. The result was that she was advanced
and for another year was tried on various operations without being
able to make good. By this time everybody had become more or
less disgusted with Mary at home and at the factory, and Mary quit
to find other work. She returned in a few months, and as her spirit
was good it was decided to give her another trial at machine work.
Mary utterly failed to progress in spite of her apparent best efforts'
and the special attention given her for the purpose. It was then
decided to try her at an operation where she was required to follow,
certain lines of the garments, trimming off surplus goods with hand
shears — an operation that is simple from the point of view of the
dexterity and intelligence required. Mary immediately began to make
progress, and her earnings are averaging with the best. This is a
typical case showing the waste of time and effort which it is hoped
will be minimized with the assistance of tests. It is the aim to use
the tests as an aid in selection, to avoid placing people who are
either normal or subnormal on kinds of work for which they are very
likely to prove unfit.
The purpose of these tests in the second place is somewhat differ-
ent, but it is of very great importance in an organization such as that
of the Clothcraft Shops. It is the practice of this organization to fill
positions of clerical or executive nature, and in fact all better posi-
tions of any kind, by advancement. By this method a considerable
percentage of the organization is moved up during a year's time.
At the best a large number of mistakes have been made by advancing
individuals to positions beyond their capacity. This, of course, in-
volves eventually a reduction in position or loss of the individual to
the organization. In any case the organization has suffered by a
position poorly filled, and the individual, as well as those responsible
for his training, has gone through a period of discouragement which
often leaves a permanent effect. It is hoped by means of these tests
to .minimize these errors. . . .
Whenever possible the workers should be trained to perform more
than one kind of work. In this way they can be used to help out
in cases of emergency, some of which occur daily in every large
PERSONAL RELATIONSHIP 175
establishment because of absences or other reasons. In the Clothcraft
Shops all those willing to learn other work are given opportunity to
do so and are paid a retainer while learning. All employees who are
capable of helping out on an operation are carefully listed, and a
definite hourly retainer is paid them whenever they do work on which
they are not able to earn as much as on their regular operation. At
all times the normal working force should be maintained, except
only under such conditions as are forced upon the industry and
beyond its control. Where there is a temporary lack of orders, due
to industrial depression, seasonal fluctuations, and the like, the
number of employees should not be cut down, but the number
of hours of employment should be reduced equally throughout
the whole organization. At the Clothcraft Shops this policy was
strictly adhered to during the recent industrial depression, which
reduced its normal working hours by approximately 15 per cent
for a period of six months. While the percentage of quitters for this
period was noticeably increased, nevertheless this increase was dimin-
utive as compared to the number it would have been necessary to
lay off had another policy been followed. We believe, moreover, the
duty of providing steady employment under all possible conditions
is a moral responsibility to the community at large.
The seasonal character of some industries is a well-recognized
part of this problem. There is no doubt that in order to overcome
this obstacle a great deal of public education is necessary. The fact
remains, however, that the problem can for the greater part be
solved by the industry itself. For this purpose purchases must be
standardized and the purchasing policy itself so developed that a
good proportion of orders can be anticipated.
In this connection one of the most important things is the sales
policy. Many businesses, even though having a highly developed
manufacturing organization, have not a sales policy or sales organi-
zation worthy of the name. It is only in exceptional instances that
the sales policy and the manufacturing policy are properly correlated.
Ordinarily the sales department is administered with entire disregard
of its most important function, viz., to market a product that will
permanently be of most profit to the entire organization. The Joseph
and Feiss Company, in order to meet the problem of furnishing steady
employment, have for some time past conducted an advertising
176 TRADE UNIONISM AND LABOR PROBLEMS
campaign concentrating on certain staple numbers. The volume of
sales that has resulted has been sufficient under normal conditions to
provide steady employment when other establishments in the same
industry have been shutdowh. As to this phase of the problem,
however, the surface has, as yet, only been scratched. The men who
hold the purse strings must sooner or later learn that the correct
point of view, both morally and for the purpose of permanent return
not only to themselves but to all the organization, involves the reali-
zation that the factory does not exist for the purpose of turning out
for a temporary profit whatever it is easiest to sell, but that the sales
force is part of the manufacturing organization to market whatever
it can most steadily and, therefore, most profitably produce. . . .
From the record of absentees and tardies it is shown that during
the first six months of 1915 the average number^of tardies was only
two and one-half persons per day. This is equal to one third of i
per cent of the working force. For purposes of accurate follow-up,
absences are classified as excusable and inexcusable. The excusable
absences averaged a little over seven persons per day, or nine tenths
of I per cent of the working force. The inexcusable absences
averaged only a little less than four per day, or five tenths of
I per cent. The total absentees per day averaged eleven, or only
1.4 per cent.
In regard to quitters a little more explanation is necessary. Very
few people realize the tremendous cost to industry from this cause.
Various estimates of this cost have been made. These estimates vary
from $50 to $200 per person, depending on the nature of the work
and character of employee obtainable and the percentage of old
employees who are rehired. Taking even the lowest possible esti-
mate, it would seem that any reasonable outlay of both money and
effort for the purpose of reducing this industrial and social waste
would be justifiable. At the Clothcraft Shops, in recognition of the
tremendous loss from this source and the consequent value of notice
in case of a contemplated severance from the organization, such
notice is paid for at the rate of an amount equal to a day's pay for
every week's notice, but not in any case to exceed an amount greater
than four days' pay. ... \^
Nothing shows more clearly the progress which has been made
in this respect at the Clothcraft Shops than the record of "labor
PERSONAL RELATIONSHIP
177
turnover" for the five years from igio to 1914 inclusive, as shown
in Table i.
Table i. Labor Turnover, 1910-1914
Year
Stand. Pay Roll
New Hands
Per Cent
1910
I9H
1912
I913
1914
1044
951
887
874
865
1570
807
663
569
291
150-3
84.8
747
65.1
33-5
These records tell their own story. It may be also worthy of note
that over one third of the members of the Clothcraft organization
have been in the continuous employ of the company for a period of
five years or more. It is practically impossible to obtain accurate
figures as to normal labor turnover. In the few instances where
figures are available, progress has already been made. In the case
of one large concern, in the men's clothing industry, the number of
people employed for 19 14 amounted to 115 per cent of the pay roll,
which is undoubtedly better than the average in the industry. The
following relating to a somewhat similar industry is from the report of
the Federal Industrial Relations Commission (page 166) :
An investigation of the cloak and suit industry in New York
showed the maximum number of employees in sixteen occupations
during any week of the year to be 1952. Actually, however,
the pay rolls showed that 4000 people were employed in these
occupations. . . .
The open road to talent is an essential to every successful organi-
zation. At the Clothcraft Shops the road is not only open but every
possible aid is given for advancement. Practically all positions in
the organization, including clerical and executive positions, are filled
by those who by reason of sheer personal merit have come up from
the ranks.
One of the most important functions of the Employment and
Service Department is to develop organization spirit and free ex-
pression of personal and public opinion. It forms a direct channel
of expression from its source to the ear of the management. In fact
the chief purpose of a scientifically organized department is nothing
178 TRADE UNIONISM AND LABOR PROBLEMS
more than the development of that intimate personal contact so
necessary to management. At the Clothcraft Shops about one fifth
of the total number of employees come daily in contact with the
Employment and Service Department. All cases where direct contact
with the management would be beneficial are immediately referred to
it. This requires constant daily contact of the management with the
department, and brings it into intimate relationship with a great
many more cases than would be possible in the average organization
of much smaller size. Wherever the management assumes the policy
of the closed .door, this department may well be shut down.
Results cannot be accomplished in the spirit of charity, but must
emanate entirely from a sense of justice. It must be understood that
work along the lines described above can never take the place of
wages. Such work must have as a reason for its existence not only
increased efficiency but the increased reward to which increased
efficiency is entitled. The progress of the Clothcraft Shops in respect
to wages and efficiency from June, 1910, to January, 191 5, is shown
by an increase in production of 42 per cent ; an increase in the aver-
age individual hourly wages of 45 per cent, weekly wages 37 per
cent ; and a decrease in total manufacturing cost of about 10 per
cent. During this period the weekly working schedule was reduced
from fifty-four to forty-eight hours.
It is our belief that results, such as these, are obtainable only
when scientific management is scientifically applied. Scientific man-
agement will live if for no other reason than that it has faced the
problem squarely and recognizes that the science of management is
the science of handling men.
Richard A. Feiss
XIV
SCIENTIFIC MANAGEMENT AND DICTATORSHIP
OF THE PROLETARIAT^
THANKS to the peace obtained, — in spite of its oppressiveness
and all its insecurity, — the Russian Soviet Republic is en-
abled for a certain time to concentrate its efforts on the most im-
portant and most difficult side of the socialist revolution, the problem
of organization.
This problem is presented clearly and precisely to the masses in
the fourth section of the resolution adopted at the extraordinary con-
gress of the Soviets held at Moscow on March i6, 1916, the section
which urges self-discipline of the workers and a merciless struggle
against chaos and disorganization. . . .
In every socialist revolution — and hence also in the socialist revo-
lution in Russia inaugurated by us on November 7, 1917,^ — the
main task of the proletariat and of the poorest peasantry led by
it consists in the positive and constructive work of establishing
an extremely complex and delicate net of newly organized relation-
ships covering the systematic production and distribution of prod-
ucts which are necessary for the existence of tens of millions of
people. The successful realization of such a revolution depends on
1 Extracts from address by Nikolai Lenin, Russian Communist Premier, in
June, 1P19, forecasting the decrees of the Bolshevik government issued the
following February. As a result of the confiscation of factories without compen-
sation to the owners, resulting in destruction of credit and the breakdown of
discipline, Lenin announced in this speech the resort to compulsory labor in fac-
tories, the dictatorship of industry by the leaders of the communist army, a
proposed introduction of scientific management, and the desperate predicament
that followed the expulsion of business management and the attempt of the
Soviets to operate the factories. (See Introduction, p. x.) Translated for
the Rand School of Social Science.
2 November 7, 191 7, is the date of the successful Bolshevik coup d'etat.
The Kercnsky coalition government was forced to abdicate on that day, and
the Soviet government, with the Bolshevik leaders, Nikolai Lenm and Leon
Trotsky, at the helm, was instituted in its place.
179
i8o TRADE UNIONISM AND LABOR PROBLEMS
the original historical creative work of the majority of the population,
and first of all of the majority of the toilers. The victory of the
socialist revolution will not be assured unless the proletariat and the
poorest peasantry manifest sufficient consciousness, idealism, self-
sacrifice, and persistence. With the creation of a new type of state,
— the Soviet, — offering to the oppressed toiling masses the oppor-
tunity to participate actively in the free construction of a new
society, we have solved only a small part of the difficult task. The
main difficulty is in the economic domain : to raise the productivity of
labor, to establish strict and uniform state accounting and control of
production and distribution, and actually to socialize production. . . .
We are now confronted by the third problem, which is the most
urgent and which characterizes the present period — the industrial
organization of Russia. We had to deal with it and have been
solving it ever since November 7, 1917. But heretofore, as long as
the resistance of the exploiters manifested itself in open civil war-
fare, the problem of management could not become the principal,
the central, problem.
At present it has become the central problem. We, the Bolshevik
party, have convinced Russia. We have won Russia from the rich
for the poor, from the exploiters for the toilers. And now it is our
task to manage Russia. The special difficulty of the present period
consists in understanding the peculiarities of the transition from the
problem of convincing the people and suppressing the exploiters by
force to the problem of management. . . .
" Keep accurate and conscientious accounts ; conduct business
economically ; do not loaf ; do not steal ; maintain strict disci-
pline at work." These slogans, which were justly ridiculed by revo-
lutionary proletarians when they were used by the bourgeoisie to
cover its domination as a class of exploiters, have now, after the
overthrow of the bourgeoisie,' become our urgent and principal slo-
gans. On the one hand, the practical realization of these slogans by
the toiling masses is the sole condition for the salvation of the
country, . . . and, on the other hand, the practical realization of
these slogans by the Soviet power, with its methods, and on the
basis of its laws, is necessary and sufficient for the final victory of so-
cialism. This, however, is not comprehended by those who contemp-
tuously refuse to urge such " common " and " trivial " slogans. In our
PROLETARIAN SCIENTIFIC MANAGEMENT i8i
agricultural country, which only a year ago overthrew czarism and less
than half a year ago freed itself from the Kerenskys, there remained,
naturally, a good deal of unconscious anarchism, which is increased
by the bestiality and barbarity accompanying every prolonged and
reactionary war, and a good deal of despair and aimless anger has
accumulated. If we should add to this the treasonable policy of the
servants of the bourgeoisie — the Mensheviks, the Social- Revolutionists
of the Right, etc. — it will become clear that energetic and persistent
efforts must be exerted by the best and most conscious workers and
peasants to effect a complete change in the mood of the masses and
to turn them to a regular, uninterrupted, and disciplined labor.
Only such a change accomplished by the masses of proletarians
and near-proletarians can complete the victory over the bourgeoisie,
and especially over the more persistent and numerous peasant
bourgeoisie. . . .
Of decisive importance is the organization of strict and uniform
accounting and control of production and distribution. But we
have not yet effected accounting and control in those enterprises and
in those branches and departments of economic effort which we have
taken away from the bourgeoisie. Without this there can be no
question of the second condition, just as essential to the establish-
ment of socialism ; that is, the increase of the productivity of labor
on a national scale. . . .
Heretofore measures for the immediate expropriation of the ex-
propriators were preeminent. At present preeminence must be given
to the organization of accounting and control in those enterprises
in which the capitalists have already been expropriated. Were we to
attempt now to continue the expropriation of capital at the same
rate as heretofore, we would surely be defeated. It is clear to every
thinking person that our work of organizing proletarian accounting
and control has not kept pace with the work of the direct expro-
priation of the expropriators. If we now turn all our efforts to
organizing accounting and control, we shall be able to solve this
problem ; we shall overcome our shortcomings and win our "cam-
paign" against capitalism. . . .
We have been frequently reproached by the servants of the
bourgeois for conducting a "Red Guard" attack on capitalism. An
absurd reproach, worthy indeed of servants of the money pouch!
1 82 TRADE UNIONISM AND LABOR PROBLEMS
The " Red Guard " attack on capitalism was at that time absolutely
dictated by the circumstances. First, capitalists were offering military
resistance through Kerensky and Kransnov, Savinkov and Goltz
(Gegechkori is even now offering such resistance), Dutov and Boga-
jevsky.^ Military resistance can be crushed only by military means,
and the "Red Guards" were contributing to the noblest and greatest
cause in history, the cause of emancipation of the exploited toilers
from the oppression of the exploiters.
Secondly, we could not then give preeminence to the method of
management instead of the methods of suppression, because the art of
management is not inherent in people but is gained through experi-
ence. At that time we did not have this experience. We have it now !
Thirdly, then we could not have at our disposal specialists in
different branches of science, for they were either fighting in the
ranks of the Bogajevskys or were still in a position to offer systematic
and persistent passive resistance through sabotage.
Does this mean that the "Red Guard" attack on capital is the
right method always in all circumstances, and that we have no other
methods of combating capitalism ? To think so would be too naive.
We have won with light cavalry, but we also have heavy artillery
at our disposal. We have been winning by methods of suppression ;
we will be able to win also by methods of management. We
should be able to change the methods of fighting with the change
of circumstances. We do not for a moment reject the "Red Guard"
suppression of the Savinkovs and Gegechkoris as well as of any
other bourgeois counter-revolutionists ; but we will not be so stupid
as to give preeminence to the " Red Guard " methods.
At present, when the epoch of " Red Guard " attacks is in the
main completed (and completed victoriously), it is becoming urgent
for the proletarian state authority to make use of the bourgeois spe-
cialists for the purpose of replowing the soil so that no bourgeoisie
can grow on it.
This is a peculiar stage of development, and in order definitely
to defeat capitalism we should be able to adapt the forms of our
struggle to the peculiar conditions of such a period.
1 Persons representing bourgeois counter-revolutionary elements, and social-
ist groups actively opposing the Bolsheviks and directly or indirectly aiding the
counter-revolutionists.
PROLETARIAN SCIENTIFIC MANAGEMENT 183
Without the direction of specialists in different branches of science,
such as technical men, the transformation toward socialism is im-
possible, for socialism demands a conscious mass movement toward
a comparatively higher productivity of labor on the basis which has
been attained by capitalism. Socialism must accomplish this move-
ment forward in its own way, by its own methods ; to make it more
definite — by Soviet methods. But the specialists are inevitably
bourgeois, on account of the whole environment of social life which
made them specialists. If our proletariat, having obtained power,
had rapidly solved the problem of accounting, control, and organi-
zation on a national scale (this was impossible on account of the
war and the backwardness of Russia), then having crushed the
sabotage of the capitalists, we would have obtained, through uniform
accounting and control, the complete submission of the bourgeois
specialists. In view of the considerable delay in establishing ac-
counting and control, although we have succeeded in defeating sabo-
tage, we have not yet created an environment which would put at
our disposal the bourgeois specialists. Many saboteurs are coming
into our service, but the best organizers and the biggest specialists
can be used by the state either in the old bourgeois way (that is,
for a" higher salary) or in the new proletarian way (that is, by
creating such an environment of uniform accounting and dontrol
as would inevitably and naturally attract and gain the submission
of specialists). We are forced now to make use of the old bour-
geois method and to agree to a very high remuneration for the serv-
ices of the biggest of the bourgeois specialists. All those who are
acquainted with the facts understand this, but not all give sufficient
thought to the significance of such a measure on the part of the
proletarian state. It is clear that such a measure is a compromise,
that it is a defection from the principles of the Paris Commune and
of any proletarian rule, which demand the reduction of salaries to
the standard of remuneration of the average workers — principles
which demand that "career hunting" be fought by deed, not by words.
Furthermore, it is clear that such a measure is not merely a halt,
in a certain part and to a certain degree, of the offensive against capi-
talism (for capitalism is not a quantity of money but a definite
social relationship) but also a step backward by our socialist Soviet
state, which has from the very beginning proclaimed and carried on
1 84 TRADE UNIONISM AND LABOR PROBLEMS
a policy of reducing high salaries to the standard of wages of the
average worker.
Of course the lackeys of the bourgeoisie, particularly of the petty
kind, like the Mensheviks and the Social-Revolutionists of the
Right, will sneer at our admission that we are taking a step back-
ward. But we should pay no attention to sneers. We must study
the peculiarities of the highly difficult and new road to socialism
without concealing our mistakes and weaknesses. We must try to
overcome our deficiencies in time. To conceal from the masses that
attracting bourgeois specialists by extremely high salaries is a
defection from the principles of the Commune would mean that we
had lowered ourselves to the level of bourgeois politicians who rule
by practicing deception. To explain openly how and why we have
taken a step backward, and then to discuss publicly ways and means
to overcome our deficiencies, is to educate the masses and to learn
from experience — to learn together with them how to build socialism.
There has hardly been a single military campaign in history in which
the victor has not made mistakes, suffered partial defeats, and tem-
porarily retreated at some time. And the "campaign" against cap-
italism which we have undertaken is a million times more difficult
than the most difficult military campaign, and it would be foolish
and disgraceful to become dejected on account of a temporary and
partial retreat.
Let us take up the question from the practical side. Let us as-
sume that the Russian Soviet Republic must have a thousand first-
class scientists and specialists, of recognized skill and with practical
experience in different departments of science, to direct the work of
the people in order to accomplish most quickly the economic reha-
bilitation of the country. Let us assume that these great "stars"
must be paid 25,000 rubles each per annum. Let us assume that
this sum just be doubled (supposing premiums to be -granted for
particularly successful and rapid accomplishment of the most im-
portant tasks of organization and technic) or even made four times
as large (supposing that we must get several hundred better-paid
foreign specialists). Well, then, can this expenditure of 50,000,000
or 100,000,000 rubles a year for the reorganization of the work of
the people along the lines of the latest scientific developments be
considered excessive or unbearable for the Soviet Republic? Of
PROLETARIAN SCIENTIFIC MANAGEMENT 185
course not. The vast majority of the enlightened workers and
peasants will approve such an expenditure, knowing from practical
life that our backwardness compels us to lose billions, and that we
have not yet attained such a high degree of organization, accounting,
and control as would cause the universal and voluntary partici-
pation of these "stars" of the bourgeois intelligentzia^ in our work.
Of course there is another side to this question. The corrupting
influence of high salaries is beyond dispute — both on the Soviets
(the more so since the swiftness of the revolution made it possible
for a certain number of adventurers and thieves to join the Soviets,
who, together with the incapable and dishonest among certain com-
missaries, would not object to becoming "star grafters") and on the
mass of workers. But all thinking and honest workers and peasants
will agree with us and will admit that we are unable to get rid at
once of the evil heritage of capitalism; that the Soviet Republic
can be freed from- a tribute of 50,000,000 or 100,000,000 rubles
(a tribute for our own backwardness in the organization of account-
ing and control from the bottom up) only by organization, by in-
creasing discipline among ourselves, by getting rid of all those who
"keep the traditions of capitalism," that is, the loafers, parasites,
and grafters. If the enlightened and advanced workers and peasants
succeed, with the help of the Soviet institutions, in organizing and
disciplining themselves and in creating a powerful labor discipline in
one year, then we will in one year do away with this "tribute"
(which may be reduced even earlier), depending on the measure of
success attained in creating labor discipline and organization among
the workers and peasants. The sooner we ourselves, workers and
peasants, learn better labor discipline and a higher technic of toil,
making use of the bourgeois specialists for this purpose, the sooner
we will get rid of the need of paying tribute to these specialists.
Our work of organization, under the direction of the proletariat,
of state accounting and control of production and distribution is
considerably behind our work of direct expropriation of the ex-
propriators. We understand this is fundamentally necessary for
understanding the peculiarities of the present period and of the
problems dictated by these to the Soviets. The center of gravity
of the struggle with the bourgeoisie is shifted to the organization of
1 Middle-dass intellectuals form a separate entity in Russian sodety.
1 86 TRADE UNIONISM AND LABOR PROBLEMS
accounting and control. This must be taken into account in order to
determine correctly the urgent economic and financial problems con-
cerning the nationalization of banks, monopolization of foreign trade,
state control of currency, the introduction of a satisfactory wealth
and income tax from the proletarian standpoint, and the introduction
of obligatory labor service.
We are extremely backward in regard to socialist reforms in these
fields (and they are very important fields), and we are backward for
no other reason than this — that accounting and control, in general,
are not sufficiently organized. Of course this problem is one of the
most difficult, and with the economic disorganization produced by
the war its solution must take a long time, and it should not be
overlooked that just here the bourgeoisie (and especially the numer-
ous petty and peasant bourgeoisie) give us a good deal of trouble,
disturbing the establishment of control — disturbing, for instance,
the grain monopoly, gaining opportunities for speculation and specu-
lative trade. What we have already decreed is yet far from adequate
realization, and the main problem of today consists precisely in con-
centrating all efforts upon the actual, practical realization of the
reforms which have already become the law, but have not yet become
a reality.
In order to continue further the nationalization of the banks and
to move steadily toward the transformation of the banks into cen-
ters of social bookkeeping under socialism, we must first of all
be successful in increasing the number of branches of the People's
Bank, in attracting deposits, in making it easier for the public to
deposit and withdraw money, in removing the possibility of panics, in
discovering and executing the grafters and crooks, etc. We must first
actually accomplish the simplest tasks, organize well what is already
in our possession — and only then prepare for the more complex.
We must improve and regulate the state monopolies in grain,
leather, etc., which we have already established, and thereby pre-
, pare for the state monopolization of the foreign trade ; without
such a monopoly we shall not be able to " get rid of " foreign capital
except by the payment of a "tribute." Whatever possibility of
socialist construction exists depends on whether we shall be able to
protect our internal economic independence during the transition
period by paying some "tribute" to foreign capital.
PROLETARIAN SCIENTIFIC MANAGEMENT 187
We are also extremely backward in the collection of taxes in general
and of wealth and income taxes in particular. The levying of contri-
butions on the bourgeoisie — a measure which" in principle is undoubt-
edly acceptable and deserving of proletarian approval^ — Shows that we
are in this respect still nearer to the methods of conquest [of Russia]
from the rich for the poor than to the methods of management.
But to become stronger and to make our position firm we must
adopt the last-named methods ; we must substitute for the contri-
butions exacted from the bourgeoisie steadily and regularly collected
wealth and income taxes, which will give more to the proletarian
state and which requires of us greater organization and better-
xegulated accounting and control.
The delay in introducing obligatory labor service is another proof
that the most urgent problem is precisely the preparatory organi-
zation work which, on the one hand, should definitely secure our gains
and which, on the other hand, is necessary to prepare the cam-
paign to "surround capital" and to "compel its surrender." The
introduction of obligatory labor service should be started imme-
diately, but it should be introduced gradually and with great caution,
testing every step by practical experience and, of course, introducing
first of all obligatory labor service for the rich. The introduction of
a labor record book and a consumption-budget record book for every
bourgeois, including the village bourgeois, would be a long step for-
ward toward a complete "siege" of the enemy and toward the
creation of a really universal accounting and control over production
and distribution.
The state, an organ of oppression and robbery of the people, left
us as a heritage on the part of the people a great hatred for and dis-
trust of everything connected with the state. To overcome this is a
very difficult task, which only the Soviets can master, but which
requires even from them considerable time and tremendous persever-
ance. This "heritage" has a particularly painful effect on the ques-
tion of accounting and control — the fundamental question for a
socialist revolution after the overthrow of the bourgeoisie. It will
inevitably take some time before the masses begin to feel themselves
free after the overthrow of the landowners and the bourgeoisie and be-
fore they comprehend — not from books, but from their own expe-
rience through the Soviets — that without thorough state accounting
1 88 TRADE UNIONISM AND LABOR PROBLEMS
and control of production and distribution the authority of the toilers,
and their freedom, cannot last, and a return to the yoke of capitalism
is inevitable. . . .
We have introduced labor control as a law, but it is barely be-
ginning to be realized or even to penetrate the consciousness of the
proletarian masses. That unaccountability in production and dis-
tribution is fatal for the first steps toward socialism^ that it means
corruption, that carelessness in accounting and control is a direct
assistance to the German and Russian Kornilovs, who can overthrow
the authority of the toilers only in case we do not solve the problem
of accounting and control and who with the aid of the peasant bour-
geoisie, the cadets, the Mensheviks, and the Socialist-Revolutionists
of the Right are watching us, waiting for their opportunity — this is
not adequately emphasized in our agitation and is not given suffi-
cient thought and is not sufficiently discussed by the advanced
workers and peasants. And as long as labor control has not be-
come a fact, as long as the advanced workers have not carried
out a successful and merciless campaign against those who violate
this control or who are careless with regard to control, we cannot-
move from the first step [from labor control] to the second step
toward socialism ; that is, to the regulation of production by the
workers.
A socialist state can come into existence only as a net of pro-
duction and consumption communes, which keep conscientious ac-
counts of their production and consumption, and economize labor, at
the same time steadily increasing its productivity, thus making it
possible to lower the workday to seven, six, or even less hours. . . .
To increase the productivity of labor we must first of all secure
the material basis of a large industry: the development of the
production of fuel, iron, machinery, and of the chemical industry.
The Russian Soviet Republic is in such an advantageous position
that it possesses, even after the Brest-Litovsk peace, colossal stores
of ore [on the Ural]; of fuel in western Siberia [hard coal], in
Caucasia and in the southeast [petroleum], in Central Russia [turf] ;
vast resources of lumber, water power, and raw material for the
chemical industry [karabugaz] ; and so on. The exploitation of
these natural resources by the latest technical methods will furnish
a basis for an unprecedented development of production.
PROLETARIAN SCIENTIFIC MANAGEMENT 189
Higher productivity of labor depends, iirst, on the improvement
of the educational and cultural state of the masses of the population.
This improvement is now taking place with unusual swiftness, but
is not perceived by those who are blinded by the bourgeois routine
and are unable to comprehend what' a longing for light and initiative
is now pervading the masses of the people, thanks to the Soviet or-
ganizations. Secondly, economic improvement depends on higher
discipline of the toilers, on higher skill, efficiency, and intensity of
labor, and its better organization. . . .
The most conscious vanguard of the Russian proletariat has
already turned to the problem of increasing labor discipline. For in-
stance, the central committee of the Metallurgical Union and the
Central Council of the Trade Unions have begun work on respective
measures and drafts of decrees. This work should be supported and
advanced by all means. We should immediately introduce piece-
work and try it out in practice. We should try out every scientific
and progressive suggestion of the Taylor system ; we should com-
pare the earnings with the general total of production or the exploi-
tation results of railroad and water transportation and so on.
The Russian is a poor worker in comparison with the workers of
the advanced nations, and this could not be otherwise under the
regime of the Czar and other remnants of feudalism. To learn how
to work — this problem the Soviet authority should present to the
people in all its comprehensiveness. The last word of capitalism in
this respect, the Taylor system, — as well as all progressive measures
of capitalism, — combines the refined cruelty of bourgeois exploita-
tion and a number of most valuable scientific attainments in the
analysis of mechanical motions during work, in dismissing super-
fluous and useless motions, in determining the most correct methods
of the work, the best systems of accounting and control, etc. The
Soviet Republic must adopt valuable scientific and technical ad-
vances in this field. The possibility of socialism will be determined
by our success in combining the Soviet rule and the Soviet organi-
zation of management with the latest progressive measures of capi-
talism. We must introduce in Russia the study and the teaching of
the Taylor system and its systematic trial and adaptation. While
working to increase the productivity of labor, we must at the same
time take into account the peculiarities of the transition period from
190 TRADE UNIONISM AND LABOR PROBLEMS
capitalism to socialism, which require, on the one hand, that we lay
the foundation for the socialist organization of emulation, and, on
the other hand, require the use of compulsion, so that the slogan
of the dictatorship of the proletariat should not be weakened by the
practice of a too mild proletarian government.
Among the absurd falsehoods which the bourgeois likes to spread
about socialism is the one that socialists deny the value of emulation.
In reality only socialism, destroying classes and, hence, the en-
slavement of the masses, for the first time opens up opportunities
for emulation on a mass scale. And only the Soviet organization,
passing from the formal democracy of a bourgeois republic to the
actual participation in management of the toiling masses, for the first
time puts emulation on a broad basis. This is much easier to accom-
plish on the political than on the economic field, but for the success
of socialism the latter is the more important.
Let us take publicity as a means for stimulating emulation. . . .
And we have hardly begun the immense and difficult, but also
promising and important, work of stimulating emulation between
the communes, of introducing reports and publicity in the process of
the production of bread, clothing, etc., and of transforming the dry,
dead bureaucratic reports into live examples — either repulsive or at-
tractive. Under the capitalistic system of prpduction the significance
of an individual example, say of some group of producers, was inevi-
tably extremely limited, and it was only a petty bourgeois illusion
to dream that capitalism could be "reformed" by the influence of
models of virtuous establishments. After the political power has
passed into the hands of the proletariat and after the expropriation
of the expropriators has been accomplished, the situation is radi-
cally changed, and^ — as has been many times pointed out by the
most eminent socialists — the force "of an example can for the first
time exert a mass effect. Model communes should and will serve
the purpose of training, teaching, and stimulating the backward
communes. The press should serve as a weapon of socialist con-
struction, giving publicity in all details to the successes of the model
communes, studying the principles of their success, their methods
of economy, and, on the other hand, "blacklisting" those communes
which persist in keeping the "traditions of capitalism," that is,
anarchy, loafing, disorder, and speculation. Statistics under capitalism
PROLETARIAN SCIENTIFIC MANAGEMENT 191
were exclusively in the hands of government employees or narrow
specialists ; we must bring them to the masses, we must popularize
them so that the toilers gradually learn to understand and to see
for themselves what work and how much work is needed and how
much rest they can have. In this way a comparison between the
results of the enterprise of different comi^unes will become a sub-
ject of general interest and study; the foremost communes will be
immediately rewarded (by reducing the workday for a certain period,
by raising the wages, offering them a greater, quantity of cultural or
historical advantages and treasures, etc.). . . .
No profound and powerful popular movement in history ever
escaped paying a price to the scum ; the inexperienced innovators
have been preyed upon by adventurers and crooks, boasters and
shouters ; there have been stupid confusion, unnecessary bustle.
Individual "leaders" would undertake twenty tasks at once, com-
pleting none of them. Let the poodles of bourgeois society, from
Bielorussoff to Martov, yelp and bark on account of every addi-
tional splinter going to waste while the big old forest is cut down.
Let them bark. That is what poodles are there for. We will go
ahead, trying very cautiously and patiently to test and discover real
organizers, people with sober minds and practical sense, who com-
bine loyalty to socialism, with the ability to organize quietly (and
in spite of confusion and noise) efficient and harmonious joint work of
a large number of people under the Soviet organization. Only such
persons should, after many trials, advancing them from the simplest
to the most difficult tasks, be promoted to responsible posts to direct
the work of the people, to direct the management. We have not yet
learned this. We will learn this.
The resolution of the last (Moscow) congress of the Soviets advo-
cates, as the most important problem at present, the creation of
"efficient organization" and higher discipline. Such resolutions are
now readily supported by everybody. But that their realization
requires compulsion, and compulsion in the form of a dictatorship,
is ordinarily not comprehended. And yet it would be the greatest
stupidity and the most absurd opportunism to suppose that the
transition from capitalism to socialism is possible without compulsioi?
and dictatorship. The Marxian theory has long ago criticized beyond
misunderstanding this petty bourgeois-democratic and anarchistic
192 TRADE UJ\ilUJ\lbM APMJJ l^AJiUK Jr-KUai^liyiVlS
nonsense. And Russia of 1917-1918 confirms in this respect the
Marxian theory so clearly, palpably, and convincingly that only those
who are hopelessly stupid or who have firmly determined to ignore the
truth can still err in this respect. Either a Kornilov dictatorship
(if Kornilov be taken as the Russian type of a bourgeois Cavaignac)
or a dictatorship of the proletariat — no other alternative is pos-
sible for a country which is passing through an unusually swift
development, with unusually difficult transitions, and which suffers
from desperate disorganization created by the most horrible war.
All middle courses are advanced (in order to deceive the people)
by the bourgeois, who are not in a position to tell the truth and
admit openly that they need a Kornilov, or (through stupidity) by
the petty-bourgeois democrats, — the Tchernovs, Zeretellis, and Mar-
tovs, — prattling of a united democracy, of the dictatorship of democ-
racy, of a single democratic front, and similar nonsense. Those who
have not learned even from the course of the Russian revolution of
1917-1918 that middle courses are impossible must be given up as
hopeless.
On the other hand, it is not hard to see that during any transition
from capitalism to socialism a dictatorship is necessary for two main
reasons. In the first place, it is impossible to conquer and destroy
capitalism without the merciless suppression of the resistance of the
exploiters, who cannot be at once deprived of their wealth, of their
advantages in organization and knowledge, and who will, therefore,
during quite a long period inevitably attempt to overthrow the
hateful (to them) authority of the poor. Secondly, every great revo-
lution, and especially a socialist revolution, even if there were no
external war, is inconceivable without an internal war, with thou-
sands and millions of cases of wavering and of desertion from one
side to the other and with a state of the greatest uncertainty,
instability, and chaos. ...
This historical experience of all revolutions, the universal his-
torical, economic, and political lesson, was summed up by Marx in
his brief, sharp, exact, and vivid formula: the dictatorship of
the proletariat. And that the Russian revolution has correctly ap-
proached this universal historical problem has been proved by the
victorious march of the Soviet organization among all the peoples
and tongues of Russia. For the Soviet rule is nothing else than the
PROLETARIAN SCIENTIFIC MANAGEMENT 193
organized form of the dictatorship of the proletariat — the dictator-
ship of the advanced class awakening to a new democracy and to inde-
pendent participation in the administration of the state, tens and
tens of millions of exploited toilers who through their experience are
discovering that the disciplined and class-conscious vanguard of the
proletariat is their most reliable leader.
But "dictatorship" is a great word. And great words must not
be used in vain. A dictatorship is an iron rule, with revolutionary
daring and swift and merciless in the suppression of the exploiters as
well as of the thugs [hooligans]. And our rule is too mild, quite
frequently resembling putty rather than iron. We must not for a
moment forget that the bourgeois and petty-bourgeois environment
is offering resistance to the Soviet rule in two ways : on the one
hand, by external pressure — by the methods of the Savinkovs,
Goltzes, Gegechkoris, and Kornilovs, by conspiracies and insurrec-
tions, with their ugly "ideologic" reflection, by torrents of falsehood
and calumny in the press of the Cadets, Social-Revolutionists of the
Right, and Mensheviks ; on the other hand, this environment exerts
internal pressure, taking advantage of every element of decay, of
every weakness, to bribe, to increase the lack of discipline, dissolute-
ness, chaos. The nearer we get to the complete military suppression
of the bourgeoisie, the more dangerous become for us the petty
bourgeois anarchic inclinations. And these inclinations cannot be
combated simply by propaganda and agitation, by the organization of
emulation, by the selection of organizers ; they must also be com-
bated by compulsion.
To the extent to which the principal problem of the Soviet rule
changes from military suppression to administration, suppression and
compulsion will, as a rule, be manifested in trials and not in shoot-
ing on the spot. And in this respect the revolutionary masses have
taken, after November 7, 191 7, the right road and have proved the
vitality of the revolution, when they started to organize their own
workmen's and peasants' tribunals before any decrees were issued
dismissing the bourgeois-democratic judicial apparatus. But our revo-
lutionary and popular tribunals are excessively and incredibly weak.
It is apparent that the popular view of courts — which was inher-
ited from the regime of the landowners and the bourgeoisie — as not
belonging to the workers, has not yet been completely destroyed.
194 TRADE UNIONISM AND LABOR PROBLEMS
It is not sufficiently appreciated' that the courts serve to attract
all the poor to administration (for judicial activity is one of the
functions of state administration) ; that the court is an organ
of the rule of the proletariat and of the poorest peasantry ; that
the court is a means of training in discipline. There is a lack
of appreciation of the simple and obvious fact that if the chief
misfortunes of Russia are famine and unemployment, these misfor-
tunes cannot be overcome by any outbursts of enthusiasm, but only
by thorough and universal organization and discipline, in order to
increase the production of bread for men and fuel for industry, to
transport these in time, and to distribute them in the right way ; that,
therefore, responsibility for the pangs of famine ^nd unemployment
falls on everyone who violates the labor discipline in any enter-
prise and in any business ; that those who are responsible should
be discovered, tried, and punished without mercy. The petty bour-
geois environment, which we will have to combat persistently now,
shows particularly in the lack of comprehension of the economic
and political connection between famine and unemployment and
the prevailing dissoluteness in organization and discipline — in the
firm hold of the view of the small proprietor that "nothing matters
if only I gain as much as possible."
This struggle of the petty-bourgeois environment against proleta-
rian organizations is displayed with particular force in the railway
industry, which embodies, probably, most clearly the economic ties
created by large capitalism. The "office" element furnishes sabo-
teurs and grafters in large numbers; the proletarian element, its
best part, is fighting for discipline. But between these two elements
there are, of course, many who waver, who are "weak," who are
unable to resist the "temptation" of speculation, bribery, and pler-
sonal advantage, at the expense of the industry, the uninterrupted
work of which is necessary to overcome famine and unemployment.
A characteristic struggle occurred on this basis in connection with
the last decree on railway management, the decree which granted
dictatorial (or "unlimited") power to individual directors. The
conscious (and mostly, probably, unconscious) representatives, of
petty-bourgeois dissoluteness contended that the granting of "un-
limited" (that is, dictatorial) power to individuals was a defection
from the principle of board administration, from the democratic and
PROLETARIAN SCIENTIFIC MANAGEMENT 195
other principles of the Soviet rule. Some of the Social-Revolu-
tionists of the Left carried on a plainly demagogic agitation against
the decree on dictatorship, appealing to the evil instincts and to the
petty-bourgeois desire for personal gain. The questions thus pre-
sented are of really great significance : first, the question of principle.
Is, in general, the appointment of individuals endowed with unlimited
power, the appointment of dictators, in accord with the fundamental
principles of the Soviet rule? secondly. In what relation is this
case — this precedent, if you wish — to the special problems of the
Soviet rule during the present concrete period ? Both questions de-
serve serious consideration.
That the dictatorship of individuals has very frequently in the
history of revolutionary movements served as an expression and
means of realization of the dictatorship of the revolutionary classes
is confirmed by the undisputed experience of history. The dictator-
ship of individuals has undoubtedly been compatible with bourgeois-
democratic principles, but this point is always treated adroitly by
the bourgeois critics of the Soviet rule and by their petty-bourgeois
aides. On the one hand, they declare the Soviet rule simply some-
thing absurd and anarchically wild, carefully avoiding all our histori-
cal comparisons and theoretical proofs that the Soviets are a higher
form of democracy — nay, more, the beginning of a socialist form
of democracy. On the other hand^ they demand of us a higher
democracy than the bourgeois, and argue, "Individual dictatorship
is absolutely incompatible with your Bolshevist [that is, socialist,
not bourgeois] democratic principles, with the Soviet democratic
principles."
Extremely poor arguments, these. If we are not anarchists, we
must admit the necessity of a state (that is, of compulsion) for the
transition from capitalism to socialism. The form of compulsion is
determined by the degree of development of the particular revolu-
tionary class, then by such special circumstances as, for instance,
the heritage of a long and reactionary war, and then by the forms
of resistance of the bourgeoisie and the petty bourgeoisie. There
is, therefore, absolutely no contradiction in principle between the
Soviet (socialist) democracy and the use of dictatorial power of in-
dividuals. The distinction between a proletarian and a bourgeois
dictatorship consists in this : that the first directs its attacks against
196 TRADE UNIONISM AND LABOR PROBLEMS
the exploiting minority in the interests of the exploited majority;
and, further, in this: that the first is accomplished (through in-
dividuals) not only by the masses. of the exploited toilers but also by
organizations which are so constructed that they arouse these masses
to creative work of historic significance. The Soviets belong to this
kind of organization.
With respect to the second question on the significance of indi-
vidual dictatorial power from the standpoint of the specific prob-
lems of the present period, we must say that every large machine
industry — which is the material productive source and basis of
socialism — requires an absolute and strict unity of the will which
directs the joint work of hundreds, thousands, and tens of thousands
of people. This necessity is obvious from the technical economic
and historical standpoint and has always been recognized as its
prerequisite by all those who have given any thought to socialism.
But how can we secure a strict unity of will ? By subjecting the will
of thousands to the will of one.
This subjection, if the participants in the common work are
ideally conscious and disciplined, may resemble the mild leading of
an orchestra conductor ; it may also take the acute form of a dic-
tatorship, if there is no ideal discipline and consciousness. At any
rate, complete submission to a single will for the success of the proc-
esses of work organized on the type of large machine industry is
absolutely necessary. This is doubly true of the railways. And
just this transition from one political problem to another which in
appearance has no resemblance to the first constitutes the peculiarity
of the present period. The revolution has just broken the oldest,
the strongest, and the heaviest chains to which the masses were
compelled to submit. So it was yesterday. And today the same
revolution — and indeed in the interest of socialism — demands the
absolute submission of the masses to the single will of those who
direct the labor process. . . .
We have successfully solved the first problem of the revolution.
We saw how the toiling masses formed in themselves the fundamental
condition of a successful solution — united efforts against the ex-
ploiters to overthrow them. Such stages as October, 1905,^ and
^October, 190S, saw the beginning of the first Russian Revolution. It was
during that month that the general strike was declared and the open struggle
PROLETARIAN SCIENTIFIC MANAGEMENT 197
March and November, 191 7, are of universal historical significance.
We have successfully solved the second problem of the revolution
■ — to awaken and arouse the downtrodden social classes which were
oppressed by the exploiters and which only after November 7, 191 7,
have obtained the freedom to overthrow them and to begin to take
stock and to regulate their lives in their own way. The "meeting-
holding" of the most oppressed and downtrodden, of the least-
trained toiling masses, their joining the Bolsheviks, their creating
Soviet organizations everywhere, — this is the second great stage of
the revolution.
We are now in the third stage. Our gains, our decrees, our laws,
our plans, must be secured by the solid forms of everyday labor
discipline. This is the most difficult, but also the most promising,
problem, for only its solution will give us socialism. We must learn
to combine the stormy, energetic breaking of all restraint on the part
of the toiling masses with iron discipline during work, with absolute
submission to the will of one person, the Soviet director, during work.
We have not yet learned this, but we will learn it.
The restoration of bourgeois exploitation threatened us yesterday
through the Kornilovs, Goltzes, Dutovs, Gegechkoris, Bogajevskys.
We defeated them. This restoration, the very same restoration,
threatens us today in a different form, through the environment of
petty-bourgeois dissoluteness and anarchism, in the form of ordinary,
small, but numerous attacks and aggressions of this environment
against proletarian discipline. This environment of petty-bourgeois
anarchy we must and we will conquer.
The socialist character of the Soviet democracy — that is, of
proletarian democracy in its concrete particular application — con-
sists first in this : that the electorate comprises the toiling and ex-
ploited masses ; that the bourgeoisie is excluded. Secondly, in this :
that all bureaucratic formalities and limitations of elections are done
away with ; that the masses themselves determine the order and
the time of elections and with complete freedom of recall of elected
officials. Thirdly, that the best possible mass organization of the
vanguard of the toilers — of the industrial proletariat — is formed,
between the revolutionary forces and the autocracy ensued. The Czar's
government was forced to grant a constitution (October 30) and establish a
parliamentary form of government (Duma).
1 98 TRADE UNIONISM AND LABOR PROBLEMS
enabling them to direct the exploited masses, to attract them to ac-
tive participation in political life, to train them politically through
their own experience ; that in this way a beginning has been made
for the first time actually to get the whole population to learn how
to manage and to begin managing. . . .
This proximity of the Soviets to the toiling people creates special
forms of recall and other methods of control by the masses which
should now be developed with special diligence. For instance, the
councils of popular education deserve the fullest sympathy and sup-
port as periodical conferences of the Soviet electors and their dele-
gates to discuss- and to control the activity of the Soviet authorities
of the particular region. Nothing could be more foolish than turning
the Soviets into something settled and self-sufficient. The more
firmly we now have to advocate a merciless and firm rule and dicta-
torship of individuals for definite processes of work during certain
periods of purely executive functions, the more diverse should be the
forms and means of mass control in order to paralyze every possi-
bility of distorting the Soviet rule, in order repeatedly and tire-
lessly to remove the wild grass of bureaucratism. . . .
Try to compare with the ordinary, popular idea of a " revolution-
ist" the slogans which are dictated by the peculiarities of the present
situation : to be cautious, to retreat, to wait, to build slowly, to be
mercilessly rigorous, to discipline sternly, to attack dissoluteness.
Is it surprising that some "revolutionists," hearing this, become full
of noble indignation and begin to "attack" us for forgetting the
traditions of the November revolution, for compromising with bour-
geois specialists, for compromises with the bourgeoisie, for petty-
bourgeois tendencies, for reformism, etc. etc.? . . .
Nikolai Lenin
Premier, Russian Soviet Republic
XV
.PREMIUM AND BONUS SYSTEMS OF PAYMENT^
IT IS very difficult to distinguish between the premium and the
bonus systems of remuneration, for the two names are used almost
indiscriminately. The term "bonus" is, however, more frequently
applied at the present time to any contingent payment, and any
plan under which such payments are offered is likely to be called
a "bonus" plan or system.
The first examples of such plans were, however, known as pre-
mium plans. Under them the extra payment or premium was
generally a fixed proportion, usually a half, and almost never more
than a half, of what the workers' regular wages would be for the
number of hours or minutes by which he reduced the time formerly
taken on an average to turn out a given amount of work. The
essentials of the system were set forth by Mr. F. A. Halsey,^ with
whose name the premium system is most closely associated, in a
paper read before the American Society of Mechanical Engineers in
1891.'
The essential principle is ... as follows : the time required to
do a given piece of work is determined from previous experience, and
the workman, in addition to his usual daily wages, is offered a
premium for every hour by which he reduces that time on future
work, the amount of the premium being less than his rate of wages.
Making the hourly premiums less than the hourly wages is the
iProm Appendix B, "The Standard Rate in American Trade Unions," Johns
Hopkins University Studies in Historical and Political Science, Series XXX,
No. 2 (1912), pp. 23S-241.
2 Systems of payment involving the essential features of the "premium
plan," that is, extra payments for time saved at rates below the regular rate
for that time, had been occasionally used in the metal trades before Mr. Hal-
sey's plan was proposed. Some of these were referred to as "bonus" plans.
{Transactions of the American Society of Mechanical Engineers, Vol. VIII,
p. 469; Vol. X, p. 622 ; Vol. XII, p. 767)
^Ibid. Vol. XII, pp. 7SS et seq. Paper, without discussion, Economic Studies,
American Economic Association, Vol. I, No. 2 (1896).
199
200 TRADE UNIONISM AND LABOR PROBLEMS
foundation stone on which rest all the merits of the system, s^nce
by it if an hour is saved on a given product the cost of the work is
less and the earnings of the workman are greater than if the hour is
not saved, the workman being in effect paid for saving time.
Assume a case in detail: Under the old plan a piece of work re-
quires ten hours for its production, and the wage paid is 30 cents
per hour. Under the new plan a premium of 10 cents is offered the
workman for each hour which he saves over the ten previously re-
quired. If the time be reduced successively to five hours, the resulfs
will be as follows :
Time Consumed
Wages per
Premium
Total Cost
OF Work
Workman's Earn-
ings PER Hour
(Hours)
Piece
Col. 2 + Col. 3
Col. 4-i-Coi.. i-
10
JS3.00
$0.00
$3.00
$0.30
9
2.70
O.IO
2.80
0.311
8
2.40
0.20
2.60
0.325
7
2.10
0.30
2.40
0-343
6
1.80
0.40
2.20
0.366
5
1.50
0.50
2.00
0.40
The amount of the premium, according to Mr. Halsey, should vary
with the degree to which the extra output requires an increased
exertion on the part of the worker. In 1895 he said:
The only system which will endure is the one which pays the
least possible per piece of product. The purpose of these systems is
not, primarily, to pay higher wages but to produce cheap work, the
adjustment sought being one which shall give the workman an in-
creased wage per day in return for the decreased cost per piece of
product.^
The more recently advocated systems, to which the term "bonus"
has usually been applied, seem to have as their essential aim the
reaching of a specific output considerably higher than the previous
average. Mr. F. W. Taylor described a system of remuneration be-
fore the American Society of Mechanical Engineers in 1895, which
he called a "differential rate system of piecework," in which the
central aim was to secure " the largest amount of work of a certain
kind that can be done in a day." A rising rate per piece as the
output increased toward the maximum was the stimulus offered the
1 Transactions, Vol. XVI, p. 885.
PREMIUM AND BONUS SYSTEMS 201
worker in the scheme of payment.^ Mr. Taylor insisted then and
later that the central point in his system was the ascertainment
through a determination of "unit times," that is, the shortest time
in which each separate operation can be performed, of the maximum
output which can be expected in a given time from good workmen
working at the highest rate of speed which can be regularly main-
tained. His differential rate system of payment was intended as an
inducement to the men to maintain that rate of output after it had
been ascertained.^
In 189s, in reply to a criticism that the rise in the rate as the out-
put approaches the maximum results in a higher labor cost per piece
for the enlarged output than would be the case under an ordinary
piece system, Mr. Taylor said :
On the contrary, with the differential rate the price will, in nine
cases out of ten, be much lower than would be paid per piece either
under an ordinary piecework plan or on day's work. An illustration
of this fact can be seen by referring to paragraphs 78 to 83 of the
paper, in which it will be found that a piece of work for which
the workmen had received for years, under the ordinary piecework
system, 50 cents per piece, was done under my system for 35 cents
per piece, while in this case the workmen earned $3.50 per day,
when they had formerly made, under the 50 cent rate, only $2.25
per day.' . . .
It is quite true that under the differential rate the workingmen earn
higher wages than under other systems, but it is not that they get
a higher price per piece, but because they work much harder, since
they feel that they can let themselves out to the fullest extent with-
out danger of going against their own interests.*
In 1 90 1 Mr. H. L. Gantt presented to the same society a paper
describing a " Bonus System of Rewarding Labor, being a System of
Task Work with Instruction Cards and a Bonus." Under his plan
of payment the specified task is made the worker's goal, and if he
fails to reach it he receives no bonus.
'^Transactions, Vol. XVI, pp. 856-^03. (This paper is also reprinted in the
Economic Studies, Vol. I, No. 2.)
^Ibid. Vol. XVI, pp. 87S, 903; Vol. XXIV, pp. i337-i338.
3 In the case referred to, the original output was four to five a day; the
maximum was set at ten, and when ten were produced in a day 35 cents per
piece was paid; when less than ten were turned out in a day less per piece
was paid. *Ibid. Vol. XVI, pp. 887 et seq.
202 TRADE UNIONISM AND LABOR PROBLEMS
If the man follows his instructions and accomplishes all the work
laid out for him as constituting his proper task for the day, he is
paid a definite bonus in addition to the day rate which he always
gets. If, however, at the end of the day, he has failed to accomplish
all of the work laid out, he does not get his bonus but simply his
day rate. . . . This system is, so far as the writer is aware, a new
one, but it is based on the principles of Mr. Fred. W. Taylor's system
of elementary rate fixing.^
Mr. Harrington Emerson describes a system of bonus pa5mient in
the Engineering Magazine for February, 1909, which is based on a
system of "standard time determination." A "standard time" is
established, which is considered the minimum time in which the
given output can be reached by the use of the best methods. The
worker who turns out the work in the "standard" time is said to
have an "efficiency of 100 per cent." The workman receives a
fixed sum and in addition receives as a bonus a percentage of his
regular rate which increases more than proportionally with each per
cent of efficiency attained above 67 per cent. At 80 per cent
efiiciency, for instance, the bonus is 3.27 per cent; at 90 per cent,
9.91 per cent ; at 95 per cent, 14.53 PC cent ; and at 100 per cent
efficiency it is 20 per cent. If the workman increases the output
above the " standard," the bonus increases i per cent for each added
percentage of efficiency above 100 per cent ; at 133% per cent
efficiency, for example, the bonus would be 53}^ per cent.
The average output before the introduction of the system is con-
sidered as 67 per cent efficiency. A worker who reaches 100 per cent
efficiency must turn out 50 per cent more output in a given time than
before. Assume, for example, that workmen with a wage rate of
40 cents an hour have been turning out on an average 6 units of a
given article in six hours. The new " standard time " for 6 units is
set at four hours. One and a half units of output is now said to be
a "standard hour." If the worker turns out 6 units in six hours,
as before, he has made but four standard hours in six hours of
working time and his efficiency is but 67 per cent. Therefore, he re-
ceives simply his hourly rate of 40 cents and no bonus. If he turns
out 6 units in five hours, he has made four standard hours in five
hours of working time and his efficiency is 80 per cent. He will now
^Transactions, Vol. XXIII, pp. 341-372; Vol. XXIV, p. 1322; Vol, XXX,
p. 1042.
PREMIUM AND BONUS SYSTEMS 203
receive his regular rate of 40 cents an hour for the five hours worked
and a bonus of 0.327 per cent of that sum — a total of $2.07, or 41.4
cents an hour. If he does the work in standard time and turns out
the 6 units in four hours, he has made four standard hours in four
hours of working time and receives his regular rate for the latter,
S1.60, plus 20 per cent of that as a bonus — a total of $1.92, or 48
cents per hour. If he should be able to reduce the standard time
to such an extent that he halves his previous time for the 6 units, he
makes four standard hours in three working hours and his efficiency is
1333^ per cent. He would then receive pay at his regular rate for
the three hours, $1.20, plus a bonus of 53^ per cent of that — a
total of $1.84 or 6iJ^ cents an hour.
The labor cost to the employer, or the price per piece received by
the worker, decreases, of course, as the output increases. At the old
output, or 67 per cent efficiency, the rate per unit ia 40 cents ; at
80 per cent efficiency it is 34.5 cents ; at 100 per cent, 32 cents ; and
3-t 133K psr cent, 30% cents.
These plans for bonus payment are frankly intended to stimulate the
worker to increased effort. Mr. Taylor, Mr. Gantt, Mr. Emerson, and
Mr. Halsey all assume that most workers could considerably increase
their outputs under present methods without over-exertion. Mr. Taylor
said in 1903, in advocating his system of work and payment :
That there is a difference between the average and the first-class
man is known to all employers, but that the first-class man can do in
most cases from two to four times as much as is done on an average
is known to but few, and is fully realized only by those who have
made a thorough and scientific study of the possibilities of men. . . .
It must be distinctly understood that in referring to the possibili-
ties of a first-class man the writer does not mean what he can do
when on a spurt or when he is overexerting himself, but what a good
man can keep up for a long term of years without injury to his health
and become happier and thrive under .^
It appears from other statements of this writer that the difference
between what the first-class man can do and what the average man
does lies largely, in his opinion, in differences in intensity of effort.^
Mr. Taylor does, however, lay great stress upon the necessity of
selecting the men who are to be asked to work under his plan.
1 Transactions, Vol. XXIV, p. I34S-
2 Ibid. Vol. XVI, pp, 864, 878; Vol. XXIV, p. 1350.
204 TRADE UNIONISM AND LABOR PROBLEMS
Mr. Gantt says that for a " fixed daily wage " the ordinary work-
man "will seldom do more than a fraction of the work he can
do.^ " Mr. Emerson, in describing his own efficiency system, quotes
Mr. Taylor's views with approval and proceeds on the same assump-
tion that the worker, if he will, can greatly increase his output without
injury to himself.'^ In his first paper, in 1891, Mr. Halsey, speaking
of the daywork plan, said :
He [the workman] has consequently no inducement to exert him-
self and does not exert himself. ... In certain classes of work an
increase in production is accompanied with a proportionate increase
of muscular exertion, and if the work is already laborious, a liberal
premium will be required to produce results. In other classes of
work increased production requires only increased attention to speeds
and feeds, with an increase of manual dexterity and an avoidance
of lost time. In such cases a more moderate premium will suffice.^
The same views are reaffirmed by Mr. Halsey in an article in the
American Machinist, March, 1899.
Mr. Gantt and Mr. Emerson both emphasize particularly that the
increased outputs are to come in large part from improvements in
the methods followed by the workman in performing his tasks. The
payment of bonuses is advocated not only as a means of calling out
additional exertion on the part of the worker but as an inducement
to the workman to follow instructions and to cooperate in the intro-
duction of methods which increase output with only a fractional in-
crease in exertion on his part. Their systems are rather " efficiency "
systems than mere schemes of payment ; the bonus plans of payment
are followed only as a part of the general scheme for increasing the
efficiency of the working-force and thereby reducing the labor cost
of production.*
David A. McCabe
Princeton IJNivERSiTy
^ Transactions, Vol. XXIV, p. 267.
^Engineering Magazine, May, 1908.
^ Transactions, Vol. XII, p. 760.
*Ibid. Vol. XXIII, p. 341; Vol. XXX, p. 1063; Engineering Magazine,
May, 1908; February, 1909, passim.
XVI
PROTECTION OF PIECE RATE^
PIECE rate is the leading variety of those forms of industrial
remuneration which are known collectively as "payment by
results." Under each of these methods, in contrast to time wage, the
performance of the workman is measured at frequent intervals, and
he is paid accordingly. He thus works for himself as well as for the
employer and has a direct incentive to "take up the slack" on his
work, which last may often be accomplished through exercise of
ingenuity as well as through greater exertion. Under time wage the
advantage or gain from taking up slack accrues solely to the em-
ployer, and the only incentive that the workman has to create that
gain (apart from any contingent participation in the profits or the
fear of discharge ) is the indirect or generalized incentive of a pos-
sible future advance of his rate of pay or promotion to a higher
position. Day by day and job by job as he goes along^ the typical
workman remunerated by the hour is a hireling paid for his time, not
a tradesman -paid for his product, and any reward for well-doing is
too remote and contingent to have full psychological effect. " Pay-
ment by results" dignifies labor by making the workman to a degree
his own master, and on each job it has direct psychological effect
with respect to zeal of performance. This is the theory of payment
by results, but unfortunately the application of it has been such as
to bring about much discontent and bitterness in the industrial
world, and to cause widespread "limitation of output," or just the
opposite of taking up slack.
Methods of wage payment by results fall into three main classes :
the "bonus" method (including differential piece rate), the "pre-
mium" method (including some bonus schemes falsely so called),
and ordinary piece rate. All these methods have several subvarieties.
Piece rate is used in combination with guaranteed time wage in sev-
eral different ways ; there are a number of different forms of the
iProm American Economic Review, Vol. IX (1919). PP' 4SS-467-
205
2o6 TRADE UNIONISM AND LABOR PROBLEMS
premium method and of the bonus method. Even if a few distinctive
types alone were described, the technicalities involved would make
this paper unduly long and complex. My purpose in writing it will
therefore be best served by confining myself to a discussion of
"straight" piece rate; that is, the payment of a fixed amount of
money, irrespective of the time actually taken, for each unit of prod-
uct counted, measured, or weighed.
The leading elements of piece rate are revealed when we consider
what is done in "setting a rate" or "pricing a job" to be paid for
by this method.
1. There is the more or less complete definition of the job. The
job is, or should be, a certain operation on a certain "part" or kind
of material, performed by hand or by machine, and there may be
certain appliances to facilitate the work, such as jigs or other tools.
Of course it makes a great difference what machines, run at what
speed, working on what quality of material, and in what quantity.
The workman cannot get his hand in as well on short jobs frequently
changed as on long jobs changed infrequently. Piece rate is not neces-
sarily confined to "repetition work," but, as is well known, it fits
best that class of manufacturing.
2 . There is the determination of the approximate time it will take
to do the job ; that is, usually, not the time for the individual piece
but for the whole number of pieces (or yards or pounds ) to be done
together as one batch or lot. For example, five hours is estimated to
be the time required to do, working briskly, a lot of 500 pieces.
3. There is taken into consideration the grade of labor proper for
the job and the hourly wage rate of that grade ; for example, for
this job a grade of labor that calls for weekly earnings of $22 in
a fifty-five-hour week and therefore a time rating or base wage of
40 cents an hour. (If the working hours per week were forty-four,
then for this $2 2-a-week grade of labor the time rating would be
SO cents an hour.) This base wage multiplied by the estimated time
required or expected to be taken yields a rate or price for the job
which is the equivalent of the standard of pay thus far assumed to
be proper for the job. (Thus five times 40 cents equals $2.) This
last is called, in shop terminology, " time." If the workman should
do just two of these jobs in a ten-hour day and be paid $4, he would
be said to be making his " time."
PROTECTION OF PIECE RATE 207
4. And, finally, it is taken into consideration (wherever piece
rates are properly set) that the workman must be rewarded for the
desired and expected "piece-rate intensity of effort," or voluntary
zeal in performance, which is the employer's object in going to the
trouble of putting the job on piece rate and incurring continuing
expense in counting and recording for the pay roll after the rate is
set. If the workman is to have opportunity to make only "time"
on the job, he will not exert himself to develop speed or ingenuity any
more than if he were on ordinary day wage. He must have the in-
centive of an opportunity to make more than his time ; there must
be a bonus factor in the piece rate. Accordingly the piece-rate
equivalent of the base time wage, ($2 in, this case) is increased by,
say, 25 per cent to enable the workman to make at the assumed
proper speed of working what is called "time and a quarter" — $2.50
for the job, or 20 cents an hour, or $5 in a ten-hour day.. This final
revision of the job price sets a standard rate of remuneration for the
job as put on piece rate, the unit of pay being adjusted to the unit
of effort, which is what the workman sells in the last analysis rather
than the physical product. If the employer, as sometimes happens,
omits the bonus factor from the revised piece rate and depends for
results upon " driving," he is attempting to get " piece-rate intensity
of effort" without paying for it.
The rest of the process of rate-setting is merely arithmetic —
dividing the revised job price by the number of pieces comprising
the job or lot ( 500 in this case) , which yields five tenths of a cent
as the individual piece rate, or piece price, for doing this work.
Thereafter, whatever the varying number of pieces the workman may
do in any pay-roll period, the ascertained count is multiplied by five
tenths of a cent and he finds the money in his pay envelope to
correspond. It is obvious that as long as the rate stands un-
changed the advantage from any "time saved" in doing the work,
as compared with the estimated time required by which the rate was
set, accrues solely to the workman. That is, the employer gains
nothing on direct labor cost if the workman takes up more slack than
was expected. The employer's gain in that event consists in a lower
total cost by reason of the fixed charges or overhead being spread
over a larger product, together with the further indirect advantages
from prompt delivery to customers and other like considerations.
2o8 TRADE UNIONISM AND LABOR PROBLEMS
To sum up, the complicated structure of a piece rate properly set
includes (i) the definition of the job (not merely the name of
the job but a statement of the controlling conditions under which the
work is done); (2) the time-required basis; (3) the base time
wage, or hourly rating ; (4) the bonus, or standard reward for effort,
which the workman is expected to earn if the actual time taken coin-
cides with the time expected to be taken. The labor value of any
time saved by a greater speed of working is to go to the workman
as additional bonus.
The great source of trouble in the prevailing practice of piece rate
is that the time-required basis of the rate is usually, in fact almost
always on new work, estimated far too liberally. There are a variety
of reasons for this : for one thing, the desire to enable men new to
the work to earn good pay from the start. (A commendable object
that should be achieved by another method, by paying a learner's
retaining fee.) But chief of all is the lack of proper definition of
the job before the time estimate is made. Indeed, such is the usual
absence of any attempt at adequate standardization of the job —
predetermination of proper speed and feed of the machine, quality
of the material, appliances to be used, motions of the workman —
that the conditions under which the work is to be performed are
quite in the air, and it is a euphemism to say that the necessary
time to be taken is "estimated." It is merely guessed at, and even
the guessing is not done with respect to anything that is definite.
Accordingly, as soon as the workman becomes thoroughly habitu-
ated to the work and the job itself is " smoothed out," it is commonly
found that it can be done easily in much less time than that embodied
in the rate. If nothing holds the workman back from doing what
he can do, he goes ahead taking up slack until presently there is
such a saving of time that his earnings mount to " time and a third,"
"time and a half," "double time," or even more.
It is to be noted that such is the cumulative effect of doing work
in the time saved and getting pay for it that the workman's earn-
ings for any pay period increase in accelerated ratio with the time
saved. To earn "time and a half," even under piece rate with no
bonus factor, it is not necessary for the workman to reduce his time
of performance by 50 per cent of the time embodied in the rate, but
by only 33^^ per cent of that time. If he should cut the time in
PROTECTION OF PIECE RATE 209
half (not at all an uncommon accomplishment, even where the time
is supposed to have been set "close"), his earnings when he is work-
ing consistently at that speed would become "double time." He
would then repeat the job we figured above four times instead of
twice in a ten-hour day, or would turn out 2000 pieces and be paid
for a day's work, at four tenths of a cent per piece, $8 (or double $4,
which was "time"). But in the example before us the workman is
entitled to five tenths of a cent per piece, a rate that contains a
25 per cent bonus factor. So, then, if he turns out 2000 pieces a day
instead of 1000 (through a saving of time of 50 per cent) he will
earn $10 a day or "double time and a half," instead of the "time
and a quarter" ($5) that he was supposed to be able to earn. It is
evident, therefore, that a bonus factor as high as 25 per cent cannot
be embodied in a piece rate with prudence, unless the time-required
basis be predetermined very accurately ; and, in fact, so high a bonus
factor would rarely be used where usual rate-fixing methods are
employed. Also it is clear that with or without a liberal bonus factor
the root of the difficulty with piece rate is miscalculation of the
time-required basis of the rate. Errors in favor of the workman in
estimating the time required are obviously costly to the employer
and must often result in extravagant earnings. And when such ex-
travagant, "out-of-line" earnings do occur, the next thing that hap-
pens, of course, is that the piece rate is cut to reduce the workman's
wages to what is reasonable. The opposite also frequently occurs
by reason of the time required being estimated "short," entailing
that under the rate established the workman cannot make even his
"time." Piece rate is, in fact, a nicely balanced, unstable method
of paying wages, requiring fine calculation and adjustment to give
satisfactory results ; and under the prevailing hasty, inexact prac-
tice the fine adjustment called for is made after the rate is set and
"tried out" instead of previously as it should be. There are, to be
sure, a considerable number of industries with well-established piece-
rate scales changed infrequently. But generally speaking there is a
vast amount of tinkering to correct the error of badly set rates.
Raising the rates to make them right does little harm; it is the
lowering or "cutting" of the rates which works mischief— a mis-
chief that can hardly be exaggerated, for it means the utter de-
moralization of the workman.
210 TRADE UNIONISM AND LABOR PROBLEMS
Before we proceed to further discussion of the effect of rate-cutting
upon the workman, let us first examine into the question of its
justification. It is often alleged that an error of liberality in setting
a piece rate is not costly to the employer, that he "doesn't lose any-
thing by it," but even gains. Now of course if the employer had
occasion to compare merely the performance and earnings of his own
workmen in any class of piecework relatively to each other, it is true
that the speediest and highest-paid man of the group would be the
most profitable man. The labor cost per unit of his product is no more
than that of the slowest, and the overhead expense per unit is much
less. But the employer usually is compelled by competition to com-
pare his pay roll as a whole with those of his rivals. He cannot keep
on paying extravagant wages and, continue in business. If his rival
has guessed better than he has in setting his piece rates, he must
reduce his own so that the earnings of his men collectively will be in
line with those of the rival. Moreover, the employer has occasion
to make comparisons between different grades of piece-rate workers,
and between workmen and foremen, within his own establishment.
If some of his workmen are earning what is right by piece rates
properly set and others are earning extravagant wages by piece rates
that are improperly set, the effect will be jealousy and bickering.
The earnings must be harmonized to keep the peace. Also it is a
scandal, subversive of discipline and calling for remedy, when the
extravagant piece-rate earnings of workmen cause them to have more
money in their pay envelopes than the foremen have in theirs. It
therefore comes about that as long as errors are made in estimating
the time basis of piece rates, piece rates will have to be cut. This
statement is central to the main argument of this paper. Piece rates
by and large in industry will have to be cut : there are reasons —
ample, controlling, permanent reasons. It is of no use railing at
employers and their rate-setters for their alleged, "stupidity" in
cutting rates. It is of no use preaching up the Golden Rule to
industrial managers as a remedy for rate-cutting. As long as rates
are set as they usually are they will have to be cut.
But, say the proponents of "scientific management," piece rates
need not be "set as they usually are"; they may be and should be,
set by " time study," and then the rates can stand. Apart chiefly from
overlooking the effects of competition in a changing world, this is a
PROTECTION OF PIECE RATE 211
logical position. The idea is that by means of thorough standardiza-
tion of the job, which always precedes a proper time study, and by
the time study itself, the rate-setter ascertains in advance the amount
of slack that can be taken up in doing the work and so discovers
the exact time required. With that information he then sets a rate
under which it is impossible for the workman to make extravagant,
runaway earnings. Such is the confidence of scientific-management
men in the accuracy of time study (together with overlooking or min-
imizing the effect of changes in the competitive situation), that wher-
ever piece rates are set by that method a definite promise is made
in writing to the workmen on each job that the rate will never be cut,
unless the job changes its character so that it becomes a new job.
The present writer is a believer in time study and has had direct
experience with it. He is of the opinion that it holds much promise
for the future betterment of industrial relations. Nevertheless, it has
its limitations and does not invalidate the position taken above, that
in industry in general, in the future as in the past, piece rates will
have to be cut. For one thing the expense of time study, properly
performed, places bounds to its extension in the field of industry.
Also the accuracy of its methods and the permanency of its results,
under actual working conditions in industry, are not as great as the
theory of the device calls for. Under time study, errors are made
in setting rates, sometimes serious errors, and it is therefore a dan-
gerous practice to make in good faith definite written promises that
the rate will "never" be cut "unless the nature of the job changes."
And this last qualifying clause in the agreement presents a large op-
portunity for evasion on the part of the unscrupulous employer or
his overzealous rate-setter. Anyone having the slightest acquaint-
ance with the details of workshops knows that no end of "nibbling"
of rates can be introduced through the expression "unless the nature
of the job changes." I am aware that the danger here is guarded
against in genuine scientific-management shops by certain methods
(the use of the so-called instruction cards), but these methods may
fall into disuse through the carelessness of subordinates, and the
honest purpose of the proprietor may not endure. In any shop
after a time there may come a king who "knew not Joseph." In
short, such is the effect of multitudinous details, technical and com-
petitive change, carelessness, excessive zeal, and human greed that
212 trAde unionism and labor problems
time-study methods cannot be depended upon to abolish rate-cutting,
even where the expense of those methods dofes not preclude their
iise. Rate-cutting emerges from the nature bf things industrial ;
heither old nor new devices of rate-setting can secure the inviolate
maintenance of piece rates. The protection of piece rate (removal
of the chief evil connected with piece rate) must therefore come
about not through vain attempts to abolish rate-cutting but through
the adoption of appropriate methods of safeguarding the interests of
labor when rates are cut.
The effect of rate-cutting, as now practiced without safeguards,
upon the individual workman directly affected and upon the whole
body of workmen throughout industry is lamentable. Whether the
employer does it arbitrarily and aboveboard, or whether he does
it underhandedly by means of tricks and evasions, either way its
primary effect is virtually to fine the workman for ingenious and
speedy work (as it inevitably appears to him) and to bring it
about that he and his fellows do more work (deliver more units of
effort) for less pay. By reason of rate-cutting, as Sidney Webb has
said, a "subtle degradation" goes on with respect to any standard
rate, linking pay with effort, that the workmen seek to maintain.
The secondary effect with respect to workmen is, of course, that they
seek to safeguard their interests against this attack ; and they do so
by means of a whole system of reprisals. The characteristic form of
these reprisals is deliberate limitation of output — purposeful "sol-
diering" in its various aspects. Also there is opposition to putting
time work on piece rate where it should be ; and, furthermore,
especially in England, there is opposition to proper analysis or "rout-
ing " of work which would lend itself to the introduction of piece rate.
There are, of course, as already stated, some establishments where the
evil of rate-cutting has been at a minimum and where in consequence
little limitation of output obtains. But the general situation in in-
dustry, both with and without labor organization, is one of widely
ramifying open or covert war against output, resulting in huge
amounts of wealth-not-created. The evil of limitation of output is
complicated with the lay-off evil (which has its own appropriate
remedy) ; nevertheless its chief continuing cause is unsafeguarded
rate-cutting. The more intelligent workmen know, of course, that
slow-work practices are no part of a constructive program of advance
PROTECTION OF PIECE RATE 213
for labor ; they do these things merely to meet the exigencies of the
existing situation, as a counter-attack against an attack made on
themselves.
And the great waste of industrial power and loss of wealth to so-
ciety, including the workers, is not the only serious aspect of this
warfare originating chiefly in the cutting of piece rates. From the
great mass of chicaneries and injustice, about evenly divided be-
tween the two sides, emerges a lamentable and unnecessary degrada-
tion of the human spirit. It hurts all honorable workingmen in their
self-respect to practice limitation of output. Moreover, the bitterness
that prevails in workshops between the workmen with the spirit of
solidarity and the crass individualists, or so-called, "piece-rate
hogs," is most regrettable. As one experienced and conservative
labor spokesman^ Mr. Portenar, has said: "A man shows his naked
soul when he works at piece rate." The "chasers" and other stool
pigeons that many employers use in their efforts to circumvent the
reprisals of labor increase the sum of hatred in the world in a way
that is not necessary to get the world's work, rightly ordered, done.
A workman has a right to a decent life in industry, and society pays
if he fails to get it.
And now to come to the conclusion of the whole matter. It is
absurd for society, itself so large a sufferer, to let industry go on
muddling in the slough of this piece-rate difficulty unaided. With
hundreds of millions, possibly billions, of lost wealth at stake, in-
convenienced by strikes and other contingent evils, it is absurd for
people at large to allow the parties in direct interest to "fight it
out " in a war that has no ending. Society has pursued the hands-off
policy in the past doubtless because it was thought that, such was
the mass of details involved, the state would be incompetent to
intervene to advantage. Also the serious difficulty and danger of gov-
ernmental interference in any economic matter involving supply and
demand has been appreciated. But it is clear that the state is com-
petent to intervene in this matter of piece rate to advantage, avoid-
ing the details and the ultimate economic determinations, by laying
down fundamental rules of method and procedure. That is what
the general body of commercial law does, and all it does. Why should
industry in the aspect before us be allowed to continue to be a bear
garden? Organized society, the state, should add to its concepts
214 TRADE UNIONISM AND LABOR PROBLEMS
of law and conceive every industry to be "affected with a public
interest," and enact appropriate regulations accordingly. Piece rate
should be protected by law based on a general policy, as indicated
above, of prescribing forms of procedure. No direct interference
with matters properly determined by supply and demand (such as
the base time wage) ought to be undertaken ; simply the substitution
of definition and publicity for indefiniteness and secrecy.
Let it be enacted into law, and the means of enforcement pro-
vided, that in every shop where piece rates are used :
1. A list of rates shall be published showing not only the rates
themselves but the "elements" from which they are derived — the
definition of. the job, the time-required basis, the base time wage,
and the amount of the bonus factor.
2. A statistical accounting shall be kept of the earnings (or per-
formance record) of the individual workmen under each rate, and
audited at stated intervals.
3. A statement of the period during which each rate shall stand
without revision downward shall be made a part of each piece-rate
agreement and published.
4. The rules of revision, or the limit to which revision downward
may take place, shall be stated in sufficiently explicit terms and
published.
For example, under the last head, if at the stated time of revision
it shall be found that the average earnings of a group of workers
on a certain piece rate have been "time and two thirds" (or some
other predetermined amount) the rate may be cut, but only to a
point that will yield the average worker "time and one third" (or
some other predetermined amount) as shown by the average of the
performance records. That is, the new, reduced rate shall be so set on
the basis of the average speed attained by the group that a certain
standard of pay is safeguarded. Contrariwise, at the stated time of
revision (or between times) any rate that is found to yield average
earnings below the standard of pay aimed at shall be revised upward.
A somewhat elaborate code will have to be developed to protect
the interests of the employers as well as those of the workmen in
the application of the foregoing principles. The principles or leading
rules themselves will require amplification. For one thing, there is
the problem of what to do with small groups or single workers where
PROTECTION OF PIECE RATE 215
the law of averages is not available. In such cases there should be a
lump-sum payment in compensation for loss of earnings when a piece
rate which yields extravagant wages is reduced. The method em-
ployed might be capitalization of the excess earnings considered as
an annuity on the basis of some predetermined rate of interest. Then,
again, there is the question of what procedure should be followed
when, as often happens, a high-grade piece-rate workman is tem-
porarily placed on a low-grade piece-rate job. The rules for such
special assignments should be predetermined and published. A special
higher rate for the job cannot (without creating jealousy) be offered
in such cases for the benefit of the particular workman ; his custom-
ary earnings must therefore be safeguarded by calculating how much
he ought to earn with due diligence by the established rate and then
adding to this a fixed time-wage retainer. To illustrate : his custom-
ary piecework earnings per hour are 50 cents ; what he can be
reasonably expected to earn per hour at the temporary piecework is
30 cents ; the guaranteed hourly retainer, which he would supple-
ment by his own efforts, would be 20 cents. Where such a retainer
is not paid in these cases, usually the workers "soldier" to a degree
(as I have myself seen) which is the despair of foremen. Workers
always resent injustice in wage matters and commonly endeavor " to
get even," although with honorable employers of course no injustice
is intended. The rules of order and publicity suggested above would
be opposed by many employers, and yet undoubtedly they would be
to the advantage of employers as well as wage-earners. It is to
the interest of everybody that ways and means be found, as they
can be, covering all circumstances to encourage piece-rate workers
to do their best. These ways and means will not be found by the
general mass of managers of industry working without assistance.
The chief practical difficulties in a general plan for protection of
piece rate will be those which will arise from the necessity of estab-
lishing proper uniformities and proper diversities in piece-rate scales
as between one shop and another in the same district and as between
different districts for a whole national industry. Here, again, I think
the state should require published rules of procedure, but these rules
would have to be arrived at through organized employers and or-
ganized employees freely using the methods of collective agreement.
As for that matter, the whole body of rules suggested above for the
2i6 TRADE UNIONISM AND LABOR PROBLEMS
protection of piece rate, primarily in the workers' interest, will have
to rest ultimately (although the state takes the initiative) upon the
basis of unionism and the practice of collective bargaining. Not only
must all the cards — not some of them, but all of them — be placed
on the table to protect piece rate in the workers' interest, but also
the workers must have adequate control as to what those cards shall
be. The representatives of the organized workers should inspect
the methods of determining the time required on piece-rate jobs;
they should pass upon the bonus factor ; they should audit the record
of earnings ; and above all they should have a say as to the base
time wage embodied in each piece rate. The labor organization and
the mechanism of collective bargaining and representation sufficient
to perform these tasks (not merely to satisfy labor but because logic
and right reason demand it) will have to rest on a broader basis than
mere individual workshop boards or committees. To solve the piece-
rate problem, and all the other problems of industrial life, there
must be indeed unionism broadly established and recognized and sup-
ported by society. Society must realize that the manifold interests
of working men and working women in every shop cannot be ade-
quately protected unless they appear before their employers by
counsel. The outsider, an official of the intershop union, is not
strictly an analogue of legal counsel (he brings his own interests into
the case) : nevertheless that term is useful as indicating the nature
of the function of expert assistance which he renders his clients in
any shop. The workingman, when engaged in buying his wage by
the exchange of his mental and physical effort, often needs to be
coached as to his demands, and he has therefore the occasion and
the right to employ counsel to examine into all the conditions of
the deal and through him to state what terms he is willing to accept.
And not only should the workingman have the right to do
business with his employer by counsel (through the official of his
union) but he should actually do so. Therefore, in the absence of a
union (as is often the case, especially with women workers and the
sweated trades generally) , the state itself should appoint such coun-
sel, similarly to what is often done in criminal trials. Is it not
absurd that in the multitudinous industrial cases, so vastly im-
portant in the aggregate, hundreds of thousands of workers who
most of all need expert defense are left without any? The hands-
PROTECTION OF PIECE RATE 217
off policy, the "let them fight it out" policy in these matters must
be absolutely abandoned, not merely in the interest of the workers
but in the interest of the employers and of all of us. Of recent days
events have brought a condition under which industry will profit
greatly by a speedy introduction of the "common rule" into all
matters affecting remuneration of labor and other conditions of em-
ployment. Employers, legislators, courts, all of us, should get some
new concepts with respect to labor organization and labor standards
and act upon them without delay. Order should be introduced into
a realm where hitherto there has been anarchy.
These last matters are to a degree collateral to the proposals made
above for compulsory rules of procedure and publicity with respect
to piece rate. Further discussion of them is therefore out of place
here. What I wish to emphasize now is that, however necessary
collective bargaining may be as the basis of adequate protection of
piece rate in the worker's interest, published rules of procedure re-
quired by law as set forth above are also necessary to the protection
of piece rate in society's interest. So long as the methods of piece
rate are left in an undefined, chaotic condition there is grave danger
that collective bargaining operating under such conditions may
seek to solve the tangled problem in reactionary and harmful ways.
It is abundantly clear from evidence published of late that in the
engineering trades in Great Britain, for example, organized labor
has protected piece rate not by intelligent regulation but by stub-
born opposition to its introduction and by outrageous practices of
limitation of output. The whole situation was apparently too con-
fused to admit of intelligent regulation ; there was no foundation or
preparation for the proper exercise of the forms of collective bar-
gaining. What is needed everywhere first of all, therefore, to prevent
such things from happening is the letting in of the light, the opening
up of the subject for proper handling, by the laws suggested, which
will compel the piece-rate accounting, the publication of the scales,
the definition of the jobs, and in short the whole analysis of the
piece-rate problem into its "elements." Then upon such a basis can
come the follow-up of collective bargaining properly applied, and,
when necessary, public arbitration intelligently applied.
Charles W. Mixter
Clark College
XVII
NONFINANCIAL INCENTIVES^
THE basis of all " nonfinancial incentives" is interest in work.
Interest in work implies a desire to produce actuated by inter-
nal motives rather than external discipline.
Production means creation, and the industrial creative function
in man is a mental process and lies in his intelligent adaptation of
means to ends. It is useless, therefore, to look for real creative
work unless the workman has a chance to think and to plan ; any-
other working environment either fails to attract or actually repels
the workman, and as a consequence offers no incentive to increased
effort.
Work which does not call for thoughtful reflection, and which
uses only muscular effort, tends to draw man down to the level of the
brute and makes for industrial irresponsibility and consequent social
disorganization. The unthinking man cannot be a responsible man.
It is the self-conscious faculty of man which distinguishes him
from the animal and makes him above all a creative center through
which the universal life-giving power can deal with a particular
situation in time and space.
To use a homely illustration with which everyone is familiar,
the traffic at each crowded street crossing cannot be regulated from
the City Hall ; it requires an individual (the traffic policeman) in the
congested spot to deal with each particular situation as it arises,
and upon his powers of observation and selection depends the orderly
flow of traffic.
It is only through the individual life that the universal life can
act, and therefore the universal is compelled to evolve many indi-
vidual lives if organization and order are to replace the unorganized
state represented by the purely generic operation of natural law.
The problem of social organization is, then, how to organize
iFrom Publications of the American Society of Mechanical Engineers,
No. 1673 (1918).
218
NONFINANCIAL INCENTIVES 219
society upon the basis of respect for the individual. This is also the
industrial problem as well, for industry in the broadest sense is
society in its highest form of activity, because it is essentially con-
structive and therefore creative activity.
It was an inevitable corollary to the universal plan of creation
that the individual life came into being not to create material sub-
stance, as that had to be before individual life could gain conscious-
ness. The function of the individual life, however, is to create by
a thought process conditions especially selected to produce results
which nature unaided would fail to produce.
This is what the horticulturist does. His power lies in his knowl-
edge of natural law, and his creations are made possible because he
conforms to the law. The uncultivated orchard reverts to its original
wild state when no longer attended by man, but increases in pro-
ductiveness by continued thoughtful application of man's power of
selection and adaptation.
It is by a similar process of conscious selection that such devices
as the steamboat, steam engine, electric generator, and the telephone
came into existence. They did not come into being and never would
have been created by the generic operation of nature's laws.
To illustrate further : The desire of the savage to cross a body of
water too wide for him to swim caused him to observe the floating
of things which floated naturally. As a result of this observation he
built a raft ; and finally, by further observation, he discovered the
principle that anything which, bulk for bulk, was lighter than the
water it displaced would float, and although he perhaps uncon-
sciously applied this principle, it is true that from its application
he evolved the canoe.
It is by a continuation of the application of this same law that,
almost within our own memory, it has been made possible for the
vessels of the world to be built of iron, something which the old
shipbuilders thought impossible. We see then that it is the applica-
tion of the personal factor that now makes iron float by the use of
the very same law that makes it sink.
Upon a higher plane the modern electric generator was evolved
by observing that a wire passed at right angles through a magnetic
field would induce an electric current to flow through it in a certain
direction.
220 TRADE UNIONISM AND LABOR PROBLEMS
It was only by creating, through the application of the personal
factor, conditions by which this law could be expanded that electric-
ity was generated commercially. The electric generator is nothing
more than a large number of such wires, insulated one from another,
passing in and out of a number of magnetic fields, plus a device
for collecting and conducting away the current ge,flerated. The
important point to remember is that there never would have been
an electric generator without the introduction of the individual
personalities who literally created it.
In this connection it is well to observe that all of our creations,
if they are to be successful, depend upon the strict observance of the
laws of nature. When we clearly see man's place in the universal
life movement, we can understand why it was that in the long process
of evolution it was inevitable that a being capable of measuring by
reflection be evolved. The very word "man" is derived from an
Aryan root meaning "to measure."
All this may seem at first sight far removed from the problem
of " nonfinancial incentives," but it seems to me it is necessary before
proceeding further to gain some conception of the reason for man's
existence. The concrete illustrations of the operations of non-
financial incentives will then have greater meaning.
Man, through the exercise of his intellectual faculties so laboriously
acquired through ages of slow evolution, literally reflects the uni-
versal creative process upon the plane of the particular. There can
be no organization of material substance except through an indi-
vidual who can observe the laws inherent in the materials them-
selves. Then, by a process of reflection, these materials can be
organized into forms which they could not take unaided by the in-
dividual will or a power external to themselves.
To state the matter more concretely: man, we know, cannot
bring matter into existence, neither can he create the force which
resides in the physical elements he uses in the day's work ; what he
does is to observe nature's forces in action and then, having learned
the laws, that is, the reasons for their action in any particular direc-
tion, he seeks for means to make them Express themselves more
fully.
This, of course, necessitates the creation of conditions which do
not occur spontaneously in nature. We have here the beginning
NONFINANCIAL INCENTIVES 221
of what we call the artificial, and it is significant that the highest
type of this fonn of creation, upon a higher plane than the natural,
is termed art.
This creation of artificial conditions which, taken all together,
we call civilization is of course the product of man's organizing
power. While self-consciousness, the power of realizing the self
as apart from the rest of the universe, has been a human faculty
for untold ages before the present highly organized state of society
had been attained, it is nevertheless true that now, for the first
time in the history of the white race, we are confronted with the
problem of correcting the repressive or selfish character of civiliza-
tion so that it will serve the mass of humanity. If we fail to accom-
plish this it will be destroyed by the same creative power which
brought it into existence.
We must learn how to change the industrial environment from
one which repels mankind to one which attracts. In other words,
the incentive to work must be inherent in the nature of the work
itself.
Now what are the conditions which we must meet in the industrial
world to make work attractive? We have ample evidence that
increasing financial returns have failed to stimulate productivity,
and, on the other hand, the constant demand for shorter hours and
the increasing labor turnover are proof that work in most of our in-
dustries not only does not attract but actually repel? the workman.
We must therefore look into the working conditions themselves for
the answer. This is the only scientific method of procedure.
I should like to quote from a letter received from a very intelligent
labor leader recently ,'^ to show how the mass of employees look at the
problem and how urgent is the need for its immediate solution if
we are not to have a greatly reduced production of the necessities
of life brought about by the concerted action of the workers :
Is it not true that the industrial evolution which has brought the
trusts into existence has been the means of eliminating the " human
touch" in industry ? During the days of small industrial plants the
employer and the employee, of course, were really fellow workmen.
At the present time, however, the employee has perhaps never seen
any of the stockholders of the industrial plant where he is employed.
ijohn P. Burke, International President, Pulp Sulphite and Paper Mill
Workers' Union.
222 TRADE UNIONISM AND LABOR PROBLEMS
You say that men can be productive only when they take an
interest in their work, and they will not take this interest unless those
intrusted with the direction of their efforts realize that they must
teach them constantly how to exercise their creative powers.
While I agree with everything you say relative to creative work,
and have thought along these lines considerably myself, still, is it
possible in industries as they are constituted at preseiit to enable
the average workingman to do creative work? Isn't it true that
industry is becoming so specialized that the workman is no longer
a creator? I realize that while it may still be possible for the
workman doing certain jobs in the mill to do creative work, to a
certain extent, still isn't the tendency of modern industry more and
more toward making the workman simply an appendage of the
machine ?
In the paper you sent me you described how you designed a plan
for the men operating the hydraulic press to take an interest in their
work. This certainly is a practical illustration of what can be done
and perhaps could be cited as a refutation of what I have just
written above. I realize that there may be certain jobs in the mill
where the creative powers can still be allowed to develop and where
the workman may be given a chance to express his individuality,
but the point I am trying to bring out is that the tendency of
modern industry is away from creative efforts and gives the work-
man less and less opportunity for individual development. When I
worked in the factories, which I did from the age of twelve to
twenty-five, one of the things I found the most dissatisfaction with
was the deadening sameness of the work. I never remember a time,
when working in the factories, that I became so interested in my
work that I didn't long for quitting time to come. After leaving
factory work I got a job with a building contractor. As I became
more proficient as a carpenter, I have time and again been put doing
certain work that was more or less creative, in which I have become
so interested that I paid no attention to quitting time and have
worked for two or three hours after the time when I might have quit
work. There is joy in creative work. But, in my opinion, no matter
what schemes we may devise, modern industry is going to tend more
and more to make simply automatons of men.
I may say, however, that I could find very little to criticize in
either of your articles. You have demonstrated, from practical ex-
periments, things that I have often theorized about. The conflict in
industry during the next few years, iri my opinion, will be between
the democratic and autocratic ideas. The autocratic idea, I think, is
best exemplified by the German military machine.
I was able to convince the writer of the letter from which I have
just quoted that creative work could be done to a great extent in
NONFINANCIAL INCENTIVES 223
modern industry, and, further, that this could be accomphshed with-
out any radical changes in equipment, greatly to the advantage of
both employer and employee.
INDIVIDUAL PROGRESS RECORDS
To do this, individual progress records are necessary, so that the
workman can know from day to day how he is improving in the
mastery of the process.
The first example, illustrated by Fig. i, is from that branch of
the wood-pulp industry known as the sulphite process and shows
a cooking chart which was designed to give the cook information
about the reactions in the digesters in which the wood chips are
cooked in a 6 per cent solution of sulphurous acid partly combined
with a lime base.
The digesters have a conical top and bottom and are usually,
SO feet high by 15 feet in diameter. After the acid and chips are put
into the digester and the cover is put on,v steam is turned in at the
bottom and the pressure brought up to 75 pounds per square inch
above atmospheric pressure.
As this does not heat the digester sufficiently to produce disinte-
gration of the wood, it is necessary to relieve gas through a relief
valve on the cover. Because of the removal of this gas, which is
afterward reclaimed, more steam can come in at the bottom, and
thus the temperatures are advanced. The skill in cooking consists
in the proper control of the relief valve.
Before the introduction of these cooking charts, illustrated by
Fig. I, all this was left to the unaided judgment of the cook, with
usually nothing to help him but a small hand thermometer and a
pressure gage. Of course great variation in the pulp was the re-
sult. The cooking charts, plotted by the cooks themselves, how-
ever, helped greatly, as they enabled the quick visualization of the
work. On these charts temperatures are converted to pressures for
the reason that the pressure in the digester comes from two sources,
one the natural pressure due to steam and the other due to the
sulphurous-acid gas. The pressure, for instance, which would cor-
respond to a temperature of 212 degrees would be o, or atmospheric,
yet from the chart you will see that the gage pressure actually
224 TRADE UNIONISM AND LABOR PROBLEMS
showed 75 pounds. The difference between o and 75, therefore, is
caused by the presence of sulphurous-acid gas. As the cooking
progresses the gas is naturally used up : first, by being relieved for
the purpose of making room for more steam ; second, by the natural
100
Q 70
O 60
K 60
40
30
20
10
HOURS
TEMP.
G4GE
PRESSURE
STEAM
PRESSURE
GAS
PRESSURE
NAMES OF COOKS AND
i^PMPPAL INFORMATION
0
0
FILLEO IN HERE
(TOTAL 7.00
ACID TEST- FREE 6.06
(cOMBfNED 0.es
ACID TEMPERATURE 7B DEGREES
FAHRENHEIT
1
20
2
48
3
212
76
0
7B
4
222
75
3
72
5
233
75
7
68
6
240
75
10
65
7
250
75
16
60
8
259
75
20
55
9
273
76
29
46
10'
288
76
41
34
11
284
B7
38
19
12
281
40
36
5
13
-GAGE
— PRES
SURE-
i
— f-
1^^^
— V
"tH
^ =
— S
-t —
^■^
■'^i.
V— '
/ —
v<
^
V
— V
i .
-^%^
^
—
—t^
-,->-^i
p-^'
\-
—h
Ze^~
^•^-
— v
V
0 r 2 3 4 5 6 7 8 9 10 11 12 13
time, hours
Fig. 1. Reaction in Digesters in which Wood Chips are Cooked
combination of the acid with the organic compounds liberated during
the cooking process.
At the end of the cooking process the gage and steam pressures
. will naturally come very close together, as the greater part of the SO 2
gas has been used. The gas-pressure curve is obtained by subtract-
ing the steam pressure from the gage pressure. It is really a
NonfinAnciAl incentives 225
resultant of the other two. If it drops too rapidly the cook knows he
is relieving his digester too hard and checks the opening of the relief
valve. If it does not drop rapidly enough he knows he must open
the valve wider in order to increase the relief. Of course the figures
are taken from recording instruments which are checked daily to in-
sure accuracy. Naturally an ideal cooking chart was soon formed,
being the joint work of the cooks handling the digesters and of the
chemical-research department.
Immediately after the introduction of these charts a very marked
increase in the uniformity of the pulp was noticed, and the cooks,
while at first opposed to the new method of " cooking with a lead
pencil," as they called it, soon learned to like their work much
better, for the reason that they now had some way of visualizing
the work in its entirety. In addition to more uniform quality of
the pulp, the yield from a cord of wood increased something over
5 per cent.
CONTINUOUS PROGRESS RECORD
We soon found that it was necessary to give some sort of continu-
ous progress record if we were to keep up the interest in the work,
because no man could carry in his mind anything but a general im-
pression of his progress from day to day. Several good records for
one day are only like so many good golf drives. They are a source
of satisfaction at the time, but just as the score in golf denotes our
real mastery of the game, so does the progress record measure the
man's increasing mastery of his work, and we feel that it is one of
the moral obligations of the management to keep such records for the
individual workman. Without these records men will not think of
improvements in the process, and they cannot be blamed for becom-
ing indifferent. How long, for instance, would a superintendent or
manager retain his interest in the economical operation of his plant
if his cost sheets were withheld? We, as executives, must have
quantity, quality, and economy records, otherwise our interest soon
lags. Why, then, should we expect the workman to be interested
when he is not furnished with a record which at least reflects one of
these elements ?
Such records can be grouped under three main headings : quantity
records, quality records, and economy, or cost, records. Quality
226 TRADE UNIONISM AND LABOR PROBLEMS
records, which occupy the middle position, are, perhaps, of the
greatest importance, for they bring the individual's intelligence to
bear upon the problem and as a consequence, by removing the ob-
stacles to uniformity of quality, remove at the same time the obstruc-
tions to increased output. The creative power of the human mind
is, however, not content simply to produce the best quality under
existing conditions of plant operation. The desire to create new
conditions for the more highly specialized working out of the natural
laws of the process demands expression, and this expression at once
takes the form of suggestions for improvements in mechanical devices.
This desire contains within it the germ of economic thought,
which will unfold and express itself eventually in a request for cost
records, and the organization that neglects its opportunity to satisfy
this desire is overlooking one of the great avenues leading toward
intelligent productive effort.
Because of the interrelation of quality, quantity, and economy
records, any complete record of individual progress must, of course,
take them all into account. However, as this is not always practical,
we have at least one of three ways of measuring progress always
open to us.
We keep a continuous progress record of the work which is mainly
one of quality. By quality I do not necessarily refer to the quality of
the material produced, as most of our records refer to the qual-
ity of the work performed — in other words, the nearness to which the
workman approaches the ideal standards which he has helped to
form. The democratic cooperative forming of these standards by the
joint work of the trained technician and the practical workman is
absolutely essential, otherwise continuous progress will not be made.
The whole plan must be really educational in nature, and to be so
the records must record the natural laws of the process and the in-
dividual's degree of control of forces in the material elements that
he is using. The more factors that can be recorded, the greater the
interest in the work. The reason for this is obvious.
There are nine men cooking, the names posted in the order of
seniority, with the highest monthly record on top. There are three
foremen at the top of the record. Each of these foremen has three
cooks under him, and their standing is made up by taking the average
records of the men under them. In this way we are enabled to get
NONFINANCIAL INCENTIVES 227
not only the individual records of the men but the group, or team-
work, records as well. For the convenience of the department head
in charge a record is kept which shows the relative s'tanding of
the large, medium, and small digesters. This is irrespective of the
men who are working on them.
The total progress-record figures are made up of the temperature,
color, time, and blowing records. The relative values that these
have in the total record are shown at the top of each column, the
total adding up to 100. There is but a small variation in the
monthly-average column of each worker, and this is characteristic of
all our progress records. It shows how great is the incentive when
individual effort is intelligently recorded.
The temperature record is obtained by taking half-hourly readings
from the recording-thermometer chart, upon which a standard-
temperature curve has been plotted, calling each reading which hap-
pens to fall on the standard line 100, and a reading 20 degrees
either side of the standard line o. This means that for each degree
off of the standard, 5 points are. deducted from the progress record.
The color record indicates how near the men come to blowing the
digester when the color of the liquor shows the proper amount of
lignin in the solution. The sample, drawn from the side of the
digester, is compared with the standard color. To get a mathematical
value for this factor a range of colors from a very dark to a very
light was obtained, the particular shade which was taken as standard
marked 100 and one shade either side 10 points less than 100.
The time record is obtained by calling a certain time of cooking
100 and taking off on each digester cooked one point for each
minute above or below this standard.
The blowing record is obtained by calling 30 pounds pressure
100 (most of the cooking being done at a pressure of 75 pounds per
square inch) and 60 pounds o, the idea being to get the pressure as
low as possible before blowing the digester.
It will be noted that the temperature value is higher than any of
the others. This is because it is the most important element. The
color record coming next in importance is given the next highest
value, etc.
By an arrangement of this sort, by simply changing the relative
value of the dil^erent factors it is possible to emphasize any particular
228 TRADE UNIONISM AND LABOR PROBLEMS
phase of the work. The men willingly pay the greatest attention
to the factor that has the greatest value, because it gives them the
better recotd and because they know the reason for the change.
For instance^ if it is desired to emphasize quantity, we give a larger
value to the time record and a lesser value to the temperature record.
Production is then somewhat increased at the expense of quality.
While I could give many illustrations similar to the one just given
of our cooking operations, I will give only one final illustration of how
economy-progress records meet with equally great response. In the
plant where this system was developed were employed over 1200
men, and perhaps half of these men had individual progress records
and the rest came under some sort of group-progress record. In-
variably the records proved themselves to be an incentive to greater
productivity.
COST RECORDS OF WORK
Below is shown a foreman's detail job sheet which indicates the
method we had for giving our maintenance foremen cost records of
their work. It is obviously a difficult matter when dealing with main-
tenance and construction work to give quality or quantity records, as
the work varies so much from day to day, so the only kind of records
we could give the men were records of cost. The original suggestion
to give these records grew out qf the fact that we gave to each oper-
ating-department head a complete cost of operating his department,
for which he was held responsible. As soon as he began to realize this
responsibility, because all the repair materials were charged to him,
he at once began to make intelligent criticism of the engineering
department, and especially was he critical of the maintenance fore-
man if he was wasteful in the use of materials. As a result of this
the maintenance foremen asked the master mechanic if they could
not have job costs showing how economically they were doing their
work, as they had no idea of the value of materials that they were
using. The foreman's detail job sheet shown is the result of this
request. It will be noted that the job is fully described, the total
cost for labor and material to date is given, as well as the cost of
labor and material for yesterday. Then below is listed the itemized
cost of all materials used. The men soon became educated as to the
value of the materials they were using, and we noticed a great
NONFINANCIAL INCENTIVES
229
zni
foreman's DETAIL JOB SHEET.
Job.
Name of Job Install ZSS Hp,Mofors on Coarse Screens
. . ^. in West Mi//.
Description^
change in the amount of waste ; in fact, we had frequent cases where
maintenance foremen would bring scales into the mill to make sure
that the storehouse was giving them full measure of materials, and
we were soon obliged to get up a system of giving credit for material
returned to the storehouse, in order to help foremen keep down their
job costs. This was in no sense a form of contract system, for all
of our maintenance and construction men were paid by the hour and
did not receive any
more money for doing
a job economically.
Fig. 2 shows the con-
crete results obtained
by giving the cost
sheets to the depart-
ment heads and job
costs to the mainte-
nance foremen. It will
be noted there was a
rapid increase in pro-
duction from 1908 to
1913, also a rise in re-
pair material used as
well as an increase in
the cost of mainte-
nance labor. The fourth
curve, showing the
amount of material
used for each dollar
spent for maintenance
labor, is more or less a resultant of the two. The gradual rise
from 1908 to 191 1 in this curve was due to the increased material-
consuming power of the maintenance men because of the intro-
duction of labor-saving devices, such as pneumatic and electric
portable tools. There was a drop in these figures in 1912 and
19 13, but we were unable to get a real thought of economy started
in the plant until the departmental-cost sheets and job-cost sheets
were started. These were put into effect first in the beginning
of 19 14, and there was an immediate drop in the curve from an
E/ectrical Dept
- Power
Wiring.
Da+sStar+ed //l/ze wr,-u».
Labor Cos++oDa+fi,_ . _.
on.
3I.S-
— tJays
Material Cost +oOa+e ^___
73»
Total Cost to Date
385-?-
Labor'CoatYesterdaLi
flSO
Material Cost Yesterday
S.4I
Total Cost Yesterdau
7.2J
DETAIL OK HATER1^L USED YESTERDAY.
ITEMS.
Z-li "Long- Turn E/bows,
4j Id. Solder,
4 - IjTijpe E Candulets,
4-1^" 4 Hole Porcelains,
I Roll Oiled Lined,
I Roll Friction Tape,
16-100 Amp. Termina/s,
PRICE.
O.SI
1.23
Z.OZ
o.e4
0.24
0.11
I.6S
4 6.41
Fig. 2. Foreman's Job Sheet
230 TRADE UNIONISM AND LABOR PROBLEMS
average of about $2.15 worth of material spent for each dollar spent
for labor, down to $1.55 in 1914 and $1.05 in 1915.
That this drop is due to the greater economy and thought in the
use of materials is indicated by the fact that our maintenance crew
was not very much reduced, the saving coming almost entirely in
the use of materials.
120,00Or-
— 0
I""
lOQPOO
80,000
eopoo
40,000
300.000
^00,000
■=■6^
The drop in produc-
tion in 1914-1915 was
due to war conditions
which were unavoid-
able. It is a significant
fact, however, that in
spite of this drop in
production the mainte-
nance-material cost per
ton of pulp was re-
duced to approximately
half the amount under
the conditions of higher
production during the
two preceding years.
In none of this work
did we pay bonuses to
a superintendent, de-
partment head, or work-
man ; our salaries and
wages were high, but
1913 I9H 131S payments were all on
a monthly, weekly, or
hourly basis. The in-
creased effort, therefore,
came entirely from a desire within the individual to be produc-
tive. Of course this sort of creative effort produced great changes
in operating conditions; we increased our yearly production from
42,000 tons to 111,000 tons without adding to the number of
digesters for cooking the pulp, or wet machines for handling the
finished product, and we changed- our quality from the poorest to
the very best.
:li
o'5 5o.
E 5 o-
Fig. 3-
2.50
2.00
150
i.oq
I90S 1909 1910 1911 1912
Yftar.
Showing Concrete Results of Cost
Sheets
NONFINANCIAL INCENTIVES 231
Due to the intelligent suggestion which came from our men all
over the plant we were able to make very radical changes in the
manufacturing processes. Entirely new methods of preparing our
wood, making acid, bleaching, etc., were created, all of which were
paid for out of the earnings.
I maintain thtat this was all the result of the freedom our men
were experiencing because they were working in an environment
which stimulated thinking. They had ample opportunity con-
stantly to increase their knowledge of the underlying natural laws of
the process and were therefore able to realize the joy which comes
from a conscious mastery of their part of the process.
This freedom to express one's individuality in constructive
work according to law is the only real freedom, for freedom unre-
strained by a consciousness of the universality of natural law leads
to anarchy.
We should never lose sight of the fact that the degree of con-
scious self-expression which the workman can attain is in direct
proportion to the ability of the organization to measure, for his bene-
fit, the impress of his personality upon it. The most democratic
industrial plant, therefore, is the one which permits the fullest possi-
ble amount of individual freedom to each member irrespective of his
position, and at the same time is so sensitively adjusted that it reflects
immediately the effects of his actions. If his actions result in injury
to others, he will see that as a part of the whole he himself must also
suffer.
I have made no attempt in this paper to touch upon our method
of arriving at the proper financial compensation, as this is beyond
the scope of the subject assigned to me. I feel that I should state,
however, that in our mills in Canada, where the same scientific re-
cording of operations is being developed, our wage rates are adjusted
each spring after careful discussion with the representatives of our ■
local labor organizations. This has proved to be a very just and
satisfactory method, for the rates thus determined are really a con-
sensus of opinion of both employer and employee, and once the wage
question is disposed of, all are free to devote their energies to the
intelligent solution of manufacturing problems. Constant agitation
of the question of financial remuneration only detracts from the work,
and our experience has invariably been that there will be plenty of
232 TRADE UNIONISM AND LABOR PROBLEMS
incentive to productive effort if the working environment is such that
the workman can express himself as an intelHgent human being.
Man is not an animal, but a free, self-determining mental center
of consciousness, whose reason for existence is that the universal life
may be able to deal with a particular situation in time and space and,
by this means, be enabled to evolve a material universe organized to
express the one great individual life of which we are all a part.
In conclusion let me say that I am well aware that to some of you
this may seem like pure philosophical speculation, far removed from
the practical affairs of everyday life. I have said nothing, however,
that I cannot back up by any number of additional illustrations,
and my hope is that the examples given will stimulate others to
make similar investigations, so that we can fulfill our mission in this
country by evolving an industrial philosophy which will have for its
ultimate aim the continuous unfoldment of the latent powers in man.
Robert B. Wolf
New York
XVIII
APPRENTICESHIP IN THE METAL TRADES^
THREE problems of fundamental importance enter into indus-
trial production: the material problem, the machine problem,
the man problem.
The last might be called the main problem, for it is the most im-
portant of the three. It is also the most difficult to deal with, and
the most neglected; perhaps it is the most neglected because it is
the most difficult. Yet on its proper solution hinges largely the
success of an industrial enterprise and its capacity to maintain itself
in competition with enterprises of similar character.
All manufacturers can buy materials of approximately the same
kind and grade at about the same price ; they can also purchase
or, if need be, design and make, or have made, machines of like
productive capacity and cost as compared with those used by their
competitors. Moreover, they can study the successful manufacturing
methods of another concern and adopt them in full or in part and
improve upon them. Yet when it comes to securing and maintain-
ing the personnel and effectiveness of an industrial organization,
only intelligent effort through many years will enable one manu-
facturer to attain advantages in this respect which another may
possess by virtue of the efficiency of his human organization.
Efforts to teach the young maU; whether young in age or experience,
the knowledge or skill already acquired by his older brother are as
old as mankind. With the social and economic changes which de-
veloped during. the centuries, the character of the problem varied,
changing at first from the need of a purely vocational to that of a
more pronounced scholastic training.
During the last century, however, the vocational aspect again
forged prominently to the front, especially in countries such as the
iProm an address substantially as delivered before the Association of Iron
and Steel Electrical Engineers, June, 1916. Revised by the author, 1920.
233
234 TRADE UNIONISM AND LABOR PROBLEMS
United States, in which industrial activities rapidly began to pre-
dominate. The system of education had perforce to accommodate it-
self to the new requirements. Thus the teaching of the mechanical arts
developed on a large scale, and a marked impetus was given it in the
United States by the industrial reconstruction period following the
Civil War. As new industrial enterprises were started, and as older
ones developed in size, their owners made it their concern to teach
young men the practical work in which they themselves were engaged.
Soon, under the influence of American genius, industry expanded
at such a rapid pace that it became necessary to specialize in in-
dustrial processes to a larger degree than ever before. Somewhat
misled by the immediate results of specialization, which permitted the
effective employment of many semiskilled and even unskilled work-
men, employers came to believe that the need for well-trained
all-round skilled mechanics was now less important, and they dis-
continued to a large extent their efforts for systematic trade training.
But these employers failed to consider that the greater specializa-
tion of industry on the basis of wholesale production, and utilization
of multitudes of workers, required a large number of highly trained
men to lead and direct this ever-growing industrial army. They did
not realize that the more complex machinery, through which speciali-
zation was largely made possible, also called for a higher type of all-
round mechanics to design, construct, and install this machinery.
About that time, also, manual training was being introduced into the
public-school system, and employers readily shirked their responsi-
bility for the training of craftsmen by shifting it to the public school,
without, however, any assurance that the schools would be able to
develop quickly and effectively the required type of industrial
workers.
American employers soon became disillusioned. The exhibition
in Chicago in 1893 displayed the products of the mechanical skill of
foreign nations so impressively as to awaken American employers to
the necessities of the situation. Once more they realized that final
responsibility for training skilled workers must rest upon them, even
though they might, as they should, take justified advantage of the val-
uable help which public schools could render. The thought was
born anew among employers that only through the revival of the
apprenticeship system, modified to suit new industrial conditions,
APPRENTICESHIP IN THE METAL TRADES 235
could the superior intelligent skill be secured by means of which
they could fortify themselves against foreign competition.
A number of examples of effective trade training in industry can
be cited ; these, however, are only as a drop in the bucket when it
is remembered that there are about 300,000 manufacturing estab-
lishments in the United States, each with its need of skilled and semi-
skilled workers.
Most employers are giving but little heed to this pressing need.
The average employer, not from necessity but because of thought-
lessness or habit, still prefers to get workmen whom someone else has
trained. But if he can be convinced by concrete examples that he
can readily train his own skilled workers to meet the special re-
quirements of his business, he will quickly sense his responsibility
and, with the usual enterprise and acumen of the American business
man, apply himself seriously to the task.
It was in 1902 that the General Electric Company, employing at
that time about 4000 men, established at its works at West Lynn,
Massachusetts, a new apprenticeship system. This step was the
outcome of a study of the reasons for the seeming failures of the
then-existing apprenticeship systems. Briefly enumerated, these were
as follows :
Under the old form of apprenticeship a boy was taken into a
shop and turned over to a foreman, who was expected to teach him
the trade. The foreman, himself very busy in his regular duties and
usually more adapted by experience and inclination to the production
of manufactured materials than to the training of boys, would turn
the boy over to an assistant foreman, who in turn would pass him
down the line until he landed under the supervision of a mechanic,
skilled or' partly skilled as the case might be, but not often able to
impart his skill to the boy. Frequently, also, the run of work in a
shop was not sufficiently varied to give to the boy broad experience
of instructive character. Even though the boy's superior might pos-
sess the ability to impart to him his knowledge, and might also be
able to give him such a varied assortment of work as to afford a broad
opportunity to learn the trade, the apprentice was himself seriously
handicapped by his own limited education. Employed at work that
required the use of drawings, he could usually neither understand
them nor could he make a simple mechanical sketch. If a mechanical
236 TRADE UNIONISM AND LABOR PROBLEMS
operation required the use of mathematical formulae that were not
included in his limited school experience, the apprentice would have
to forego doing the higher grade of work that such knowledge would
have brought within his range. The apprentice became, therefore,
the victim of the daily or weekly requirements of the shop.
To overcome these difficulties, apprentices were placed under spe-
cial supervisors, whose function it was to transfer the apprentices
from one department to another in order to give them an equal
chance and a broad opportunity for training. To the extent to which
the supervisor of apprentices could harmonize the point of view of
the employer with that of the apprentice, he would fulfill his dual
function with satisfaction ; but the practial conditions in the various
departments often prevented the supervisor from doing full justice
to his task.
In the industrial struggle of today, quite different from that of
twenty-five or fifty years ago, it is more and more essential for those
who wish to rise above the average employee not only to be able
to do their work well but also to possess an intelligent understanding
of the work in which they are engaged and an imaginative outlook
as to the possibilities for better and more efficient work. Many em-
ployers fully sensed this situation and induced their apprentices to
take evening courses at public schools and in other educational in-
stitutions, but with only meager success, largely because the day's
work was in itself as much of a task as the apprentice cared to under-
take and partly because the boy was really too tired at the end of
the day to do good school work at night.
Realizing, then, that these factors were largely responsible for
the failure of apprenticeship systems, the General Electric Company
established in the Lynn Works special departments devoted exclu-
sively to the training of apprentices, placed under the supervision
of highly skilled men endowed by nature and by training with
the faculty for teaching others. There are to be found within the
big machine shops a small machine shop, and within the big wood-
working shops a small patternmaking shop, set aside for training
of boys under supervision of men well qualified for developing the
boys' aptitude for such mechanical work. Readily accessible class-
rooms were constructed, in which every apprentice is required to
devote, but on full pay, a part of his working hours to classroom
APPRENTICESHIP IN THE METAL TRADES 237
study and where, under competent instructors, he is taught those
branches of technical knowledge that will assist him in attaining the
goal of his mechanical or engineering ambition. At the same time
an effort is made to develop in the apprentice an objective as well
as a subjective point of view of the relationship between employer
and employee, in order to impart to the growing worker greater
loyalty to his work and to the man in charge of it.
Apprentices in the training room are required to perform work
of commercial character, which would have to be done by others in
the factory if it were not done by these apprentices ; in this way it
is aimed to train apprentices "in industry for industry."
The idea of maintaining special training rooms in factories was
new. The value of training apprentices on commercial work, care-
fully selected for its instructive character, lies in the fact that the
elements of time, money value, and usefulness immediately impress
themselves upon the mind of the apprentice, acting as a stimulus
and incentive to him to put forth his best efforts.
The other new idea was the introduction of classroom instruction
into the factory. The Company insists that every apprentice receive
mental as well as manual training, in order that skillful, intelligent,
and loyal artisans, and not human automatons, will be developed.
Realizing that an apprentice is entitled to play and to rest in the
evening after a day's work, and that he would unwillingly go to the
classroom if it meant a partial loss of his wages or a restriction of his
time for recreation, the Company inaugurated the plan of giving
the classroom instruction during the working-day and without loss
of wage to the apprentice.
The underlying reason for this procedure is based on the con-
viction that most boys leave school as early as permitted and go
to work, partly because school has become to them a drudgery and
partly because they want to earn money. The apprentice-school
studies are therefore made so interesting and are so correlated to the
practical work as to attract the apprentice, and his wages are paid
whether he is working in the training room or studying in the class-
room. Otherwise most apprentices would go into the classroom not
because they like it but because they must, and consequently they
would not get the full benefit from the Company's educational effort ;
they would have eyes but See not and ears but hear not.
238 TRADE UNIONISM AND LABOR PROBLEMS
At first sight the comparatively large expenditure for salaries of
classroom instructors and for wages paid to apprentices for non-
productive time spent in classrooms would seem unjustified. Ex-
perience, however, has shown otherwise, for the added intelligence
acquired in the classrooms makes the apprentice do more and better
work in the shop.
In respect to entrance requirements, any boy sixteen years of age
or over, normally developed, with a pronounced desire for the trade
which he wishes to learn and with a successfully completed grammar-
school course, is eligible for admission as an apprentice. In a few
instances boys are accepted who have not fully completed the
grammar-school course but can give adequate reason for their incom-
plete education.
We know that many a boy who has gone only through the seventh
or eighth grade of the grammar school, but for one reason or another
did not or could not graduate, will develop into a far better mechanic
than others who have completed a prescribed school course and have
received a certificate of graduation. Yet, in dealing with large num-
bers of apprentices it becomes necessary to deal with them in a fairly
uniform manner. By insisting, therefore, on a completed grammar-
school education as an entrance requirement, it is safe to start the
educational program on the basis of such educational preparation by
all apprentices. Moreover, we are thus assisting the public-school
authorities in holding the boys to the end of the school course, so
that they may learn there, as they can better learn in the public
schools than in the manufacturing establishment, the fundamentals
of education and the duties of citizenship and may obtain, at least to
a small degree, that general cultural background which adds so much
in later life to the enjoyment of life itself. Aside from the selfish aim,
therefore, of obtaining a better educated class of boys, such method
signifies an effort for cooperation with the public-school authorities,
on whose cooperation, in turn, we have to rely in the successful
carrying out of our own educational work.
All apprentices are required to serve a trial period of about two
months, during which they are closely observed to ascertain whether
they possess the natural ability for the chosen work and have the
moral stamina and general intelligence required to successfully com-
plete the course. Only those Vyho give satisfactory promise during
APPRENTICESHIP IN THE METAL TRADES 239
the trial period are allowed to sign, in conjunction with their father
or guardian, a standard agreement which outlines the conditions
of apprenticeship. The apprentice is distinctly told that the agree-
ment has no legal force and may be broken by him without fear of
prosecution. He is made to understand, however, that the agreement
is in the nature of a promise made by one gentleman to another : the
Company, on the one hand, promising to teach the trade and to pay
stipulated wages ; the apprentice, on the other hand, promising to
give satisfaction in his work and in his deportment.
Experience has shown that boys employed on this basis are
more apt to live up to the agreement than if they were working under
the impression that it is being used as a club to force them to con-
tinue at work. The percentage of apprentices who "jump" the
course after signing the agreement is remarkably low ; the average is
considerably less than 5 per cent.
As for apprentice wages, the company decided to pay remuner-
ation from the immediate beginning of the course, even during the
trial period, and to pay sufficient wages to allow boys from poor
families to enter the apprenticeship department on a self-supporting
basis. Gradually the wage schedule increased with the general in-
crease of wages in industry, until now apprentices receive at least
$5.50 per week at the start (increased in 1919 to $8.64), with
periodical increases at the rate of from $1 to $1.50 per week for
each succeeding year of apprentice training. A cash bonus of $100
is paid at the successful termination of the prescribed training
period, when the apprentice is also awarded a Certificate of Appren-
ticeship, which entitles him to recognition as a full-fledged journey-
man and outlines the course of training which he has successfully
pursued.
The apprenticeship period for grammar-school graduates is four
years, except in the case of molder apprentices, who may finish their
course within three years. Iron and steel molder apprentices, however,
must be at least eighteen years of age to undertake this somewhat
more arduous work and are in consequence paid somewhat higher
wages. The apprenticeship period for high-school graduates is three
years, and these apprentices receive wages beginning with $6.50 per
week (increased in 1919 to $10) and increasing to $11 per week
(increased in 1919 to $15.84).
240 TRADE UNIONISM AND LABOR PROBLEMS
As far as business conditions permit, graduate apprentices are en-
couraged to remain in the service of the General Electric Company.
There is no fixed standard of wages for graduate apprentices ; each
case is settled on its own merits. ' The average rate, however, is from
$3 to $3.50 per day (increased in 1919 to $5.60 per day at the start),
with splendid prospects for advancement either in the service of the
Company or in that of other industrial establishments.
Contrary to general practice, the recruit in the apprentice depart-
ment is not required to do ordinary chores, such as sweeping floors
or running errands, but is immediately put at a machine or at a bench
to perform simple mechanical operations which are strictly a part
of the trade that he desires to learn. The apprentice in training
might, for example, sweep the floors ever so clean and carry messages
ever so quickly and yet be naturally unfit for the trade. It is there-
fore essential to find out as quickly as possible whether the boy who
wants to become a machinist has an embryo machinist in his makeup ;
if there is no future machinist in him, it is of course futile to attempt
to draw one out of him. The sooner this is definitely determined,
the better for the boy and for the Company ; otherwise, both would
waste valuable time, and the boy's progress would be retarded and
his reputation injured if he should later be discharged for lack of
natural ability. The stricter the process of weeding out during the
trial period, the easier the subsequent task of training and retaining
apprentices.
From a modest beginning in 1902, with one training room about
thirty by forty feet in size and located in an available corner of
an old factory building, the apprentice system has grown step by
step and in keeping with the development of the Lynn Works, which
now employ about 13,000 persons. Apprentice training rooms for
machinists, toolmakers, and diemakers, for patternmakers and for
foundry workers, are now located in Lynn.
The training room for patternmakers occupies a space of about
16,000 square feet, with an adequate equipment of woodworking
machinery. The training room for machinists, toolmakers, and die-
makers, located on the top floor of a modern factory building, covers
a space 80 feet wide and 460 feet long, or an area of 36,800 square
feet; in it is a very complete equipment of the machines usually
needed for the mechanic, and representing now an approximate
APPRENTICESHIP IN THE METAL TRADES 241
investment of $250,000. All rooms are well lighted and ventilated
and are kept as clean as factory work will permit. The influence
of the clean and orderly shop develops in the apprentice the tendency
to personal neatness and cleanliness as well as orderly habits about
his machine or bench.
All machines are of modern type ; all are motor-driven and prop-
erly safeguarded. Similar conditions prevail in the training room
for patternmaker apprentices and, indeed, in all of the apprentice
training rooms.
In each apprentice department a wide variety of work is done
and a broad range of machines is provided with which to do it ; this
excites the boy's interest and gives him an extensive and valuable
practical experience. There is no hard and fast rule to govern the
time during which an apprentice shall be trained on one kind of
machine or on one class of work ; this depends on the ability which
he shows and, to some extent, is controlled by the character and vol-
ume of productive work which the department can secure. Generally,
however, satisfaction is attained when an apprentice can do the re-
quired work with absolute commercial accuracy and a fair degree of
speed.
In regard to accuracy of work, it is only fair to demand of the
apprentice the same exactness as engineering and commercial re-
quirements demand of the regular workers. If, from an engineering
standpoint and from that of economical manufacture, two holes
theoretically two inches apart from center to center can vary in their
location by one thirty-second of an inch one way or the other without
interfering with engineering efficiency, then any relative location of
the two holes within two inches plus one thirty-second of an inch
and two inches minus one thirty-second of an inch will be satisfactory
commercial accuracy.
When an apprentice has learned to perform a particular operation
quickly and accurately, he is often required to help in the training
of another apprentice who has not yet advanced as far as he. He is
made a leader in what is called a " team " ; that is, he becomes a
boy teacher of a boy pupil. The system disregards the age and
service period of an apprentice ; the more capable teaches the less
capable, even though the latter is older. The boys are thus taught
to respect the skill of those who have gained greater proficiency.
242 TRADE UNIONISM AND LABOR PROBLEMS
When the boy teacher has taught the boy pupil to understand the
work and to do it accurately, the boy teacher is promoted to a
different class of work, most likely in the capacity of a boy pupil to
a yet more proficient apprentice.
By this team practice the supervisory capacity of six skilled adult
instructors is expanded to meet the needs of some two hundred
apprentices grouped in one training room. In many respects better
results are thus obtained than if the instructors personally supervised
each apprentice, for the boy teacher comes into closer relationship
with his pupil. At the same time the executive ability of the boy
teacher is developed, and the importance of accurate workmanship is
indelibly impressed upon him as he strives to impress it on another.
This method trains for future foremanship those apprentices who
have native though undeveloped ability for handling men and super-
vising their work. Moreover, by this arrangement it is readily dem-
onstrated how much ability and willingness to learn an apprentice
possesses, for the boy teacher whose advancement is retarded by a
slow pupil is quick to complain of his pupil's failure to grasp mechan-
ical details or of his lack of interest in the work. If the complaint
seems justified and is not due to the boy teacher's fault, the regular
instructor endeavors by personal attention to stimulate the apprentice
pupil. Sometimes he succeeds, but more often he confirms the boy
teacher's judgment and is obliged to discharge the apprentice com-
plained of.
An important part of the work in electrical manufacture has to
do with the winding of coils, fields, armatures, and similar parts.
Skilled winders are not plentiful ; rapid expansion in the use of
electrical power in industry and in public-service work is creating
a greater demand for them. With this thought in mind the General
Electric Company endeavors to train some apprentices in this
particular line of work. Usually boys with a high-school educa-
tion are employed to learn to wind armatures and fields and
to test them for commercial use; they also strip and rewind
defective fields and armatures, a particularly instructive practice for
apprentices.
The time spent by apprentices in their respective training rooms
amounts to about half the total period of apprenticeship, and varies
somewhat with the caoacitv of the annrentirp and with nrnHiirtiup
APPRENTICESHIP IN THE METAL TRADES 243
conditions throughout the factory. Apprentices who have made
good progress in the apprentice training room are often lent to
foremen in factory departments, provided the work proposed offers
educational value that fits into the schedule of the apprentice course.
Generally, however, the entire last half of the apprentice course is
spent in factory departments, where the apprentices gain enlarged
experience and come in contact with many skilled workers. Yet the
apprentice always remains under control of the apprentice superin-
tendent and continues the prescribed daily classroom studies. If
an apprentice loafs or lowers his usual standard of work or deport-
ment after he has been transferred from the apprentice depart-
ment, he is usually brought back to the training room to serve a
discipline period before he is allowed to return to the factory
department. One dose of this discipline usually cures.
Previous to the establishment of training rooms for apprentices
foremen did not favor taking apprentices, because they were a care
— white elephants, so to speak ; they now prefer partly trained ap-
prentices to many of the men from outside who claim to be full-
fledged mechanics.
The apprentice training rooms are beehives of activity and models
of clean and orderly workshops, equipped with various makes and
styles of standard machine tools and appliances required for
practical training and economical production. It should again be
emphasized that all work done in these departments has a commercial
value either for production, equipment, or repair purposes. Nothing
is done merely for the sake of following pedagogical precepts or to
make a fine exhibition of work. It is the eminently practical char-
acter of the training system which has its most wholesome influence
upon apprentices and appeals strongly to them.
The same practical policy applies to all classroom work. The
courses of study are carefully planned, first to conform to the ap-
prentices' mental capacity, as denoted by previous school education,
and second to teach those sciences that definitely dovetail into the
operations to be performed in the chosen field of work. Grammar-
school graduates start at the lowest rung of the ladder, while high-
school graduates receive more advanced instruction, particularly in
mathematics, mechanics, mechanisms, thermodynamics, magnetism,
and electricity.
244 TRADE UNIONISM AND LABOR PROBLEMS
Every apprentice is required to pursue classroom studies for an
hour and a half every day except during July and August ; during
these months the classrooms are closed in order to give apprentices
and instructors an opportunity to take a short vacation. The prac-
tical work in the training rooms, shop departments, and drawing
and testing rooms, however, continues without interruption through-
out the year. For the convenience of the various training rooms and
shop departments, classroom attendance is distributed over the day,
some apprentices starting at the beginning and some toward the end
of the forenoon^ others at the beginning and the balance toward the
end of the afternoon. In order to segregate at frequent intervals
the more capable from the less capable apprentices as far as the
school work is concerned, the school year is divided into three
periods ; advancement from one class to the other is dependent on
satisfactory daily performance as well as on the results shown at
periodical examinations.
The endeavor is to make the instruction concretely applicable to
the practical work which the apprentices perform. Whenever possi-
ble the instructors speak in terms of materials and machinery,
facilitating the understanding of the apprentice by exhibiting the
objects to which they refer. The opportunities for doing this are,
of course, excellent in the large establishment located at West Lynn,
with its great variety of manufactures. High percentage record of
an apprentice is a secondary object, although from an organization
standpoint it may be a necessary one ; to make the apprentice
understa,nd, to make him think, and so to give him an industrial
understanding, and to impart to him pertinent information and
develop in him a general intelligence as well, is the paramount aim
of the instruction.
Apprentices who have had a grammar-school education only and
are trying to fit themselves for skillful molders, machinists, pattern-
makers, instrument-makers, steam fitters, and the like are first
taught the mathematical sciences as they relate to arithmetic and
algebra, mensuration and plane geometry, and are also given an in-
troduction into trigonometry. Abstract teaching is avoided as far
as possible. As an example, the instructor does not call merely on
a boy's memory by asking him to tell how much four times three
times six is, but rather puts the same problem to him in its
Apprenticeship in the metal trades 245
application to industrial conditions by asking him how much electri-
cal energy, expressed in certain units, is required to light a factory
consisting of three workrooms, in each of which there are four arc
lamps, each requiring six amperes, or units, of electricity for proper
operation. In stating the problem in this way the apprentices are
briefly told what an arc lamp is, are shown such a lamp and have its
operation explained to them. They are also told briefly the meaning
of an ampere as a unit of electrical measurement.
In the teaching of mensuration much emphasis is laid on the
figuring out of surface space of floors, roofs, and walls, and of the
weights of machine elements and materials. The teaching of trigo-
nometry proceeds along similar lines, but, while all other appren-
tices are required to learn trigonometric functions and the solution
of trigonometric problems, molder apprentices, on account of the
shortness of their apprentice period and because their work would
ordinarily not require such knowledge, are excused from this particu-
lar study ; some, however, take it at their own request.
The teaching of mathematics and especially of mensuration en-
ables apprentices to become acquainted with the very practical prob-
lems which they will meet later on as skilled mechanics, as foremen,
superintendents, and engineers.
Another branch of the classroom work concerns itself with in-
struction in the elements of mechanics ; the essentials of power trans-
mission as it relates to pulleys, belts and chains, and to gearing ;
the mechanics and strength of materials, a knowledge of which will
develop a better understanding of the characteristics and uses of
materials of construction and how to calculate the required strength
of a machine part under given conditions of load ; and, in a brief
outline, the prime movers as they utilize air, water, steam or other
vapors, oils, or electricity as their motive force. Again, molder ap-
prentices take only that part of the program which falls within their
allotted apprentice period; and unless it is done at their request,
they do not get instruction in magnetism and electricity, which in
its elementary treatment is taught all other apprentices. Advanced
electricity is given only to high-school graduates.
In all these subjects, so far as possible and practicable, problems
relating to the industrial life of the apprentices are selected ; with
many of these problems the apprentices have come in contact in
246 TRADE UNIONISM AND LABOR PROBLEMS
their work in the foundry and shops, and the solution of many
more will be required of them later on when they have become
skilled mechanics, foremen, or superintendents.
A very important phase of the educational work relates to the
teaching of mechanical and freehand drawing and of tool designing.
The apprentices are first taught the use of drawing instruments in
the making of straight and curved lines and combinations of the
same and then are taught projection. In its further development
the course teaches how to copy and later how to design simple and
more complicated elements of machines and mechanisms. Special
attention is directed to the necessity of proper dimensioning of
drawings.
This instruction is not for the purpose of making mechanical
draftsmen of the apprentices, although some with ability for such
work will naturally graduate into positions as draftsmen and de-
signers ; it is, however, considered essential as a foundation for
developing the ability of correctly reading and understanding me-
chanical drawings in accordance with which shop work is to be
performed. Mechanical drawing is also a prerequisite for the subse-
quent instruction in tool designing. Much emphasis is laid on the
teaching of tool design, for it is realized that good ability to design'
jigs, fixtures^ and other auxiliary tools for economical manufacture
of parts reacts upon and stimulates good ability in correctly de-
signing the parts themselves so that they can be readily machined.
Before this work is taken up apprentices are given a brief course in
freehand sketching, in order that they may acquire the art and ability
of expressing themselves quickly on paper in the language of the
technical man. The art of good and quick freehand sketching, so
much needed by the mechanic, the foreman, the superintendent, the
designer, and the engineer, is all too frequently lacking or only in-
sufficiently developed in these men.
Talks of a practical nature on subjects closely related to their
shop training or to matters of' allied interest are frequently given
to the apprentices. In a particular case the superintendent was
exhibiting a wrongly sharpened tool which he had found in use by an
operative. The superintendent took advantage of this concrete in-
stance of error to provoke a keen discussion of the right and wrong
ways of applying mechanical principles to the cutting of metal, the
APPRENTICESHIP IN THE METAL TRADES 247
object being to draw out the information from the apprentices them-
selves rather than to offer it in lecture fashion. Other "practical
talks" endeavor to explain natural phenomena, the practical appli-
cations of which the apprentices know intuitively and accept as a
matter of course without usually being able to explain them. Why
should the temperature at the top of a high mountain be considerably
lower than at its base, when the top is so much nearer to the sun,
the universal source of heat ? Why should a one-inch drill, assuming
for the purpose of discussion that it absolutely retains its size, drill
a larger hole in cast iron than in steel? Such questions are per-
tinent illustrations of the practical character of the instruction, the
one to show the effect of the density of the atmosphere, the other
to bring out the grinding effect of pulverized cast iron as it crowds
behind the drill.
Practical talks, moreover, offer a splendid opportunity for the
works physician to speak of the importance of personal hygiene,
accident prevention, proper treatment of injuries ; and for superin-
tendents, foremen, and department heads to explain special proc-
esses of manufacture or methods of business procedure.
High-school graduates who desire to become efficient draftsmen
and designers, electrical testers and installation engineers, and tech-
nical salesmen go through a three-year apprenticeship. They receive
instruction in the Engineering School of the factory, based upon a
completed high-school course. Their mathematics starts with alge-
bra and comprises instruction in trigonometry and analytical geom-
etry as well as an introduction to calculus. Special emphasis is laid
upon advanced mechanical drawing and machine design, mechanics
and mechanisms, thermodynamics, elementary electricity, electrical
measurements, and the theory and operation of direct and alternating-
current electrical machinery. The character of the instruction is
like that previously described for grammar-school graduates, but
is more advanced and intensified in degree, as is also the practical
work, first in the machinist training room and then in the drafting
and testing departments as well as in the engineering offices.
The Apprentice School has nine terms, the Engineering School
seven terms ; this makes it possible for the apprentices to complete
their school work during the prescribed periods of apprenticeship,
even if they should be held back in one or two classes.
248 TRADE UNIONISM AND LABOR PROBLEMS
The Company is also concerned with the development of a cer-
tain amount of social life among the apprentices ; it realizes that
" all work and no play makes Jack a dull boy." One or two picnics
in the summer, some dances during the winter, frequent informal
meetings in the apprentice cliibroom, an annual dinner for the Ap-
prentice Alumni Association, are among the recreational activities
encouraged by the Company.
This brief description of some of the important features of the Gen-
eral Electric Company's apprenticeship system, now extended to its
factories in various parts of the country, is presented in the hope that
it will stimulate active interest in one of the most pressing needs
of industry ; namely, the effective training of an adequate supply
of intelligent, skilled workers, who take pride in their work, whether
it be that of a mechanic, or an engineer, or that of an executive
supervising mechanics and engineers. At the same time it is hoped
to make clear that what has been done by one large corporation on
a large scale can be done as efficiently by smaller corporations on a
correspondingly smaller scale. The same fundamental principles
of training apply, and the same effective results can be obtained ;
the smaller plants have simpler needs, which can be accommodated
by simpler organization and equipment.
When an employer or his responsible assistant has once grasped
the importance of training "for industry in industry" and has
learned to understand the fundamental lines along which an ef-
fective system for the training of men must be developed, he will
always find ways and means of translating his enthusiasm and
determination into practical results.
Magnus W. Alexander
National Industrial Conference Board
XIX
PROFIT-SHARING IN THE UNITED STATES^
THE intensity of the industrial unrest of the last decade brought
in its train numerous analyses of its principal causes. Among
these the matter of the relatively low incomes of the working classes
seems to rank first and foremost. To augment the workers' earnings
without seriously disturbing the regular run of trade and industry
has become the desideratum of students of labor questions^ statesmen,
philanthropists, and employers. In the opinion of a considerable num-
ber of such public-spirited citizens profit-sharing furnishes one of
the least costly and most effective methods of achieving the desired
result.
A question as to the meaning of profit-sharing immediately arises.
The term "profit-sharing" has been extended in popular usage to
include numerous gain-sharing or bonus schemes the essential char-
acter of which places them outside of a correct interpretation of
the term. Many of the schemes known as profit-sharing systems,
although providing some supplementary remuneration to the regu-
lar earnings of the beneficiaries, do not bear any direct relation to
the actual earnings of the enterprise and cannot, therefore, be
classified as involving the principle of profit-sharing in the proper
sense of the term. As a matter of fact, very few of the methods
adopted by American employers for the purpose of augmenting the
ordinary earnings of their employees can properly be called profit-
sharing as defined by the International Cooperative Congresses.^
iprom Journal of Political Economy, Vol. XXVI (1917), PP- 1019-1033.
2 The terra "profit-sharing," strictly speaking, was defined by the Inter-
national Cooperative Congress, held in Paris, France, 1889, as "an agreement
freely entered into, by which the employees receive a share, fixed in advance,
of the profits." The same congress defined the term "agreement" as covering,
"not only agreements binding in law, but as including also cases where the
agreement is only a moral obligation, provided it is honorably carried out." The
term "profit" is to mean "the actual net balance or gain reaUzed by the opera-
tions of the undertaking." A "share" is stated to be "a sum, paid to the
249
2 50 TRADE UNIONISM AND LABOR PROBLEMS
Before proceeding any farther it is necessary to define exactly
what in the following article is meant by the term. The under-
standing of the writer is that profit-sharing, in order to be genuine,
must contain the following elements : ( i ) aggregates to be distrib-
uted to the participants^ or individual shares, are to depend princi-
pally upon the earnings of the business; (2) the proportion of the
earnings to be distributed is to be definitely determined in advance ;
(3) benefits of the scheme are to extend to at least one third of the
ordinary wage-earning or salary-earning employees. The formulated
definition, although less rigid than that of the Cooperative Con-
gresses, excludes from the category of profit-sharing all schemes
under which bonuses based upon individual efficiency are paid, usu-
ally associated with the various phases of scientific management. It
further ehminates from consideration actual profit-sharing schemes
the benefits of which are limited to a selected few of the better-
paid executive or supervisory employees.
Different reformers (some students of industrial problems, as
well as employers) have frequently addressed themselves to a con-
sideration of profit-sharing with enthusiasm and hope. Profit-sharing,
in the opinion of President Emeritus Eliot, of Harvard, may furnish
one of the principal means for a satisfactory solution of the indus-
trial strife of our present day.^ The effectiveness of such schemes
in minimizing class conflicts, however, has never been appraised.
Following the publication of the latest edition of Oilman's "Profit-
Sharing between Employer and Employee" in 1896, no compre-
hensive survey of the extent of genuine profit-sharing in the United
States was made until recently. Such a survey now appears in one
of the publications of the United States Bureau of Labor Statistics.^
employee out of the profits," such share to be "dependent upon the amount
of the profits." The share given to the employee "shall not be indeter-
minate"; that is, "it must not be a share which an employer fixes, at the end
of some period, at his absolute discretion, as distinguished from a prearranged
basis." The relative proportion of the total working force of a concern that
must share in the profits in order to establish real profit-sharing conditions
was stated to be "not less than 75 per cent." {Bulletin de la participation aux
benifices, Paris, Tome XIX (1897), pp. 220-222, cited by D. F. Schloss, Methods
of Industrial Remuneration, chap, xvii, London, 1898.)
1 Charles W. Eliot, "Profit-Sharing," in "Profit-Sharing and Scientific Man-
agement" (four addresses. Efficiency Society of New England, Boston, 1914),
pp. 3-g; also "The Road to Industrial Peace," The Nation's Business, August,
191 7, p. 16. 2 "Profit-Sharing in the United States," Bulletin No. 208.
PROFIT-SHARING IN THE UNITED STATES 251
The precise nature of this report may be inferred from the fact
that in the course of its preparation all profit-sharing plants known
to have been in existence were visited for the purpose of examining
carefully the nature of the schemes in operation, their objects, and
the results achieved. This study reveals the fact that there are at
the present time in operation in the United States sixty genuine
profit-sharing plans. The number of employees employed under
profit-sharing agreements does not exceed thirty thousand — an in-
significantly small group when compared with the total wage-earning
population of the country.
The existing profit-sharing plans are of comparatively recent
origin, only seven of them — or about one ninth — having been
established prior to 1900. Twenty-nine — or almost one half — have
been established since 191 1. Over two thirdsr-have been in opera-
tion less than ten years. Of the latter group, twenty-one, or about
one third of all, were put into effect in 1914, 1915, and 1916.'^
Over six tenths of the profit-sharing establishments are located in
three states, — Massachusetts, New York, and Ohio, — and more
than one half of them are in the North Atlantic section of the
country.^ The size of the twenty-eight profit-sharing establishments,
as indicated by the average number employed during a representa-
tive period, reveals the fact that more than seven tenths of those
reporting employed less than three hundred people and that only
slightly over 10 per cent employed one thousand or niore.' Of the
thirty-seven establishments reporting the proportion of the total
employed who participated in the distributed profits, nineteen, or
51.4 per cent, reported 80 per cent and over participating; thirteen,
or 35.1 per cent, reported 60 to 80 per cent participating ; four, or
10.8 per cent, reported 40 to 60 per cent participating ; and only
one reported 20 to 40 per cent of all the employees sharing in the ,
profits.*
In nine tenths of the plans the principal prerequisite for participa-
tion is the permanency of affiliation with the employing company, as
shown by a specific length of continuous service. The minimum of
continuous service required varies from three months to three years,
the length of time specified in more than one half of all the plans
lU S Bureau of Labor Statistics, Bulletin No. 208 (1917), P- 17.
^Ibid.p.iS. ^Ibid. *Ibid. p. ig.
2 52 TRADE UNIONISM AND LABOR PROBLEMS
being one year or less. Thus practically, all the plans exclude from
participation the so-called shifting part of their working organization,
confining the benefits to their more or less permanent employees.
In about one eighth of the plans in operation employees, in order to
participate, are required to file a written application especially pro-
vided for that purpose. Such applications are usually perfunctory
statements signed by the employees to the effect that they promise
to do faithful work and be loyal to the company. In one instance
employees obligate themselves contractually to share in the possible
losses of the year's business in proportion to their earnings, but not
to exceed lo per cent. Under this plan lo per cent of the weekly
earnings of each of the participating employees is retained by the
company until the end of the distribution period, when the amounts
thus retained are returned to the employees together with their share
of profits for the year. In the great majority of the plans studied
the basis for computing individual shares is relatively simple ;
namely, the amount of earnings of the participants. The individual
shares in such instances are determined by dividing the employees'
part in the divisible fund by the aggregate of wages of the partici-
pants in order to obtain what is usually called the profit-sharing
dividend, and then multiplying this dividend by the respective earn-
ings of each of the participants.
In all of the plans except one, discharge and leaving employment
act automatically as causes for forfeiting the share of profits for the
current year. Under one plan, only a discharge for cause results in
forfeiture ; other discharges, being more in the nature of permanent
lay-offs on account of lack of work, do not deprive employees of their
proportionate share of the profits. Some of the plans under which
shares of profits are paid in stock or in the form of savings accounts
^ penalize those leaving employment more severely than those who are
discharged, it being specified in these instances that those leaving
forfeit some part of the share of the profits of the previous year —
usually from one fifth to one third — in addition to the share of the
current year's profit. The provision that death shall be a cause of
forfeiture occurs only in about one half of the plans ; in the other
plans it is specified that the pro-rata share of the deceased employee
shall be paid to his family or dependents. In profit-sharing plans
PROFIT-SHARING IN THE UNITED STATES 253
under which the shares of profits constitute some proportion of the
dividends paid on capital the amounts of forfeited shares are usually
retained by the employer. In other plans the amounts forfeited do
not revert to the employer, but are apportioned instead among the
participating employees.
The majority of plans in operation specifically provide that em-
ployees temporarily laid off but otherwise eligible to participate and
ready to return to work upon call be not barred from participation.
Their shares in such instances are based on their actual earnings.
In one third of the plans cases of lay-off are treated "each upon its
own merits." The same treatment as that of employees laid off is
accorded to those taken sick, provided the sickness does not extend
"over an unreasonably long period" — usually not over six months.
Under one plan only is it specifically stated that sickness of an
employee carries with it a forfeiture of his share of the profits. In
this instance, however, the company maintains a special fund for
the benefit of its sick employees.
Under thirty-two plans, or more than three fourths of those re-
porting, the shares in profits were paid fully in cash. Five reported
as paying in "part stock or savings account or common fund and
part cash." Of these the following proportions were paid in cash :
one, 99 per cent ; one, 90 per cent ; one, 85 per cent ; one, 80 per
cent ; and one, 10 per cent. Under two plans the shares of profits
were credited to a common fund, which was utilized for the accumula-
tion of a pension reserve which was to be made up in equal parts of
the shares of profits and contributions by the employees.
The benefits accruing to the participating employees as a result
of the operation of the profit-sharing plans during one representative
distribution period, in terms of a percentage of the regular earnings
of participants, are shown in the table on page 2 54.
Under almost one third of the plans the profit-sharing dividend on
the regular earnings of the participants was less than 6 per cent.
Slightly over one third of the establishments paid dividends varying
from 6 to 10 per cent. The remaining third of the establishments
paid dividends of 10 per cent or more. Of the latter, five establish-
ments paid profit-sharing dividends of 20 per cent or more.^
lU.S, Bureau of Labor Statistics, Bulletin No. 208 (1917), p. 19.
2 54 TRADE UNIONISM AND LABOR PROBLEMS
Percentage of Regular Earnings received as Share of Profits in
Thirty-four Profit-Sharing Establishments
Classified Percentage of
Earnings received as Number of
Share of Profits Establishments
Under 2 i
2 and under 4 6
4 and under 6 4
6 and under 8 7
8 and under 10 5
10 and under 15 5
1 5 and under 20 i
20 and under 30 i
30 and under 4:0 2
40 and under 50 i
50 and over i
Total 34
Three main reasons may be presented as accounting for the rela-
tively low profit-sharing dividends paid under the plans. They are
( I ) the small proportions of their net profits that employers are ready
to share ; (2) the rather large numbers of beneficiaries ; and (3) the
method used in some of the plans in determining the relative interests
of employer and employees in the divisible fund. The last-mentioned
reason is the least apparent and needs a brief explanation. In the
plans under which the method of distribution explains the low profit-
sharing dividends it is usually provided that net profits set aside for
distribution are to be apportioned between employer and employees
"in proportion to their respective interests." The employer, who is
invariably the formulator of the scheme, usually assumes that his
interest in the divisible fund is represented by the amount of his
capital, while that of the employees can best be measured by the
labor pay roll. Aside from the fact that this assumption is unsound,
— the earning power of capital rather than its amount being more
analogous, if at all comparable, to the labor pay roll, — this method
of determination of relative interests results in a distribution of the
fund in a ratio of at least three to one in favor of capital, for the
reason that the annual cost of labor seldom exceeds one fourth of
the amount of capital invested. That the method of determining the
relative interests of the participants is largely responsible for the low
PROFIT-SHARING IN THE UNITED STATES 2^5
dividends paid may more clearly be seen from the fact that the only
profit-sharing establishment in the United States — moderately suc-
cessful— that has been paying considerable profit-sharing dividends
(an average of 85 per cent for the period of 1907-1916) based its
relative-interest theory upon the earning power of capital instead of
its amount. As a result of this, distributions were made at the ratio of
about three to one in favor of labor. A computation based upon actual
figures shows that had the usually prevailing notion of relative inter-
ests been, applied in this establishment the distribution ratio would
have been quite different, namely, five to one, and in favor of capital.^
From a study based upon the facts and figures found in the recent
report of the Federal Bureau of Labor Statistics, supplemented by
personal observations, the following conclusions may be drawn:
1. Almost seven tenths of the profit-sharing plans examined by the
mentioned report of the Bureau of Labor Statistics yielded to the
beneficiaries an annual augmentation of their earnings of less than
10 per cent. Therefore, if labor difficulties are to be solved thfough
considerable augmentations of the incomes of the employees, profit-
sharing, as it stands at the present time, will not do it. No one at all
familiar with the nature of the present-day wage conflicts can possibly
venture the opinion that even an all-around wage increase of 10 per
cent will contribute materially toward the establishment of industrial
peace and the creation of a general harmony of interests.
2. If, again, industrial peace is to be brought about by a better
understanding between employer and employees and the development
of mutual confidence based upon some degree of democratization
of industry, profit-sharing, in its present form at least, can hardly
render any appreciable assistance. The profit-sharing employer is
just as keen about his traditional prerogatives to hire and fire and to
run his business regardless of the opinion of his employees as his
non-profit-sharing confreres. Trade-unionism and collective bargain-
ing are no more popular in profit-sharing establishments than else-
where. In fact, no profit-sharing firm is known to have in operation
any system of collective bargaining or of definitely established
friendly relations with trade-unions. In this connection it may be of
interest to observe that one of the oldest, most widely known, and
most successful profit-sharing employers specifically excludes from
lU.S. Bureau of Labor Statistics, Bulletin No. 208 (1917), PP- 37-44-
256 TRADE UNIONISM AND LABOR PROBLEMS
the benefits of his scheme certain groups of his employees who through
unionization have raised their rates of wages "to an unusually high
point," on the theory (taught him by experience) that "good
union men are^ as a rule, poor cooperators." On the contrary, instead
of evoking good will, profit-sharing, on account of its arbitrary char-
acter under which employers unconditionally reserve to themselves
the privilege to discontinue or modify the entire arrangement, is a
rather potent breeder of suspicion and distrust.
Although substantially agreeing that their plans have greatly im-
proved their relations with the employees and contributed con-
siderably to the stabilization of their working force, profit-sharing
employers disagree greatly as to the results achieved with reference to
increasing the individual or collective efficiency of the participating
employees. Only three out of sixty stated definitely that increased
efficiency has resulted ; and these have paid unusually high profit-
sharing dividends to their employees in the past. Aside from profit-
sharing employers, neither employees nor employers have any
confidence in profit-sharing. As far as the former can give expression
to their opinions, they have put themselves on record as opposed to
it.^ This attitude of employees toward such schemes is usually ex-
plained by the fact that, in the- opinion of their leaders, profit-
sharing plans have an inevitable tendency to hinder the development
of trade-unionism and collective bargaining. Labor leaders are of the
opinion that these schemes make increased earnings uncertain, con-
tingent wholly upon employers' profits and payable only "at their
own sweet will." An informant belonging to a labor organization
explained his opposition to profit-sharing on the ground that " there
is no sense in playing a game the rules and regulations of which are
formed without the consent of one of the principal parties concerned,
such rules, furthermore, being subject to change at any time without
common consent." Workmen, he said, prefer unqualified increases in
wages to a problematical share in the employers' enterprises in the
management of which they do not partake. Employees, furthermore,
have no faith in profit-sharing, because under only one of the plans
in existence are they granted the privilege of inspecting the books of
1 For opinions of representative labor men see " Profit-Sharing by American
Employers," National Civic Federation, Welfare Department, Report (1916),
pp. 233-243-
PROFIT-SHARING IN THE UNITED STATES 257
the employer in order to convince themselves that the full share due
them has been distributed. Suspicion is further augmented because
under a majority of the plans the prospective beneficiaries are not
even given an inkling as to the specific proportion of the profits that
their employers are willing to share. What is there then, employees
repeatedly say, to prevent an unscrupulous employer from juggling
his profit-and-loss account in order to avoid the payment of the
promised benefits?
The attitude of profit-sharing employees toward such schemes is
interesting and instructive. As a rule this attitude varies with the
nature of the position held by the informant and with his general
views on industrial questions. In all, three distinct attitudes were
observed ; to wit, complete approval, absolute condemnation, and a
general indifference which took profit-sharing as a matter of course.
Profit-sharing employees who hold well-paid supervisory or execu-
tive positions were definitely in favor of the plans. To this small
group of participants the scheme appeared to be an actual realization
of a state of community of interest between employer and employee.
Among the bulk of the ordinary wage-earners two distinct opinions
prevailed. If the informant happened to be a member of a trade-
union or was an ardent believer in organized labor and collective
bargaining, his opinion on profit-sharing was analogous to those of
the labor representatives cited above ; namely, absolute disapproval
of the scheme irrespective of the benefits that might accrue to the
participants. To informants of this group the profit-sharing plan
was a carefully planned attempt on the part of the employer to
stimulate production, forestalling at the same time the possibility of
collective demands for 'higher wages and better conditions of em-
ployment. The proportion of participating employees that expressed
this opinion was not very large and constituted, perhaps, not more
than one fifth of those interviewed. The attitude of the great ma-
jority of the participating employees was one of general indifference.
Profit distributions were taken as a matter of course, were expected,
and were relied upon in the balancing of their income and expendi-
ture accounts. The employers' motives were not questioned as long
as distributions continued at regular intervals. If, however, the
shares paid grew less or their distribution irregular, suspicion was
engendered and dissatisfaction with the scheme aroused.
258 TRADE UNIONISM AND LABOR PROBLEMS
The profit-sharing field is rather unique in the sense that under
its arrangements additional duties carry with them no new rights.
Under most of such schemes the employees are constantly reminded of
the fact that they are no longer mere employees, that they are part-
ners in the business and are therefore expected to conduct themselves
as such — to avoid any moves or acts, such as requests for better
conditions and higher wages, that will inconvenience the business.
These new duties, however, involve no established rights to benefits,
for each of the schemes specifically reserves to the employer the
right (i) to determine which of the employed shall participate and
under what conditions they may do so, (2 ) to hire and fire at pleasure,
and (3) to discontinue or modify the entire arrangement without no-
tice or consent of the employees.^ Legally shares in profits thus be-
come mere gratuities, which the employer may or may not dispense.^
That profit-sharing is not popular with employers may easily be
inferred from the little headway that such wage schemes have made
in the United States as well as from the very small number of em-
ployees working under profit-sharing conditions. Employers have
but little faith in profit-sharing, because they cannot see how dis-
tributions made upon any other basis than that of individual efficiency
can possibly contribute to the augmentation of their profits.^ Con-
sidered as a direct stimulus to efficiency, real profit-sharing cannot
possibly succeed, because, under it, individual shares are to bear no
direct relation to anything but the earnings of the business. Again,
some employers feel that from a strictly equitable viewpoint em-
ployees admitted to participation in the profits are morally bound
to be willing to share in the possible losses of the business. Un-
fortunately, aside from the fact that ordinary workers do not earn
1 Commenting upon a certain pension scheme under which the annuity allow-
ances to be granted are expressly described as not a "right" of employees, Bab-
son's Confidential Labor Bulletin, L-83, August, 1917, says: "We do not
believe, though, that a plan of this kind meets the demands of labor in these days
or is quite in tune with the spirit of the age. If we are not mistaken, there
is a growing demand among workers for a recognition of rights over and above
wages. Clients should not expect a plan of this kind to exercise any influence
on radical employees."
2 For a detailed discussion of the legal status of profit-sharing, see U.S.
Bureau of Labor Statistics, Bulletin No. 208, p. 6.
2 The desire for increased profits, and not philanthropy, was responsible for
the origin of most of these schemes. U. S. Bureau of Labor Statistics, Bulle-
tin No. 208 (1917), p. 170.
PROFIT-SHARING IN THE UNITED STATES 259
I
enough to maintain a satisfactory standard of living/ much less to
assist employers in meeting business losses, one may appropriately
douht the wisdom or even the desirability of asking anyone to share
in the losses of an enterprise the management of which was to him
a sort of terra incognita — a sphere absolutely outside of his legiti-
mate jurisdiction or even inquiry.^
The degree of effectiveness of these schemes depends directly
upon the amount of benefits accruing to the participants. These
benefits have been rather small, equivalent in many instances to
less than what ordinarily grateful employers in thousands of estab-
lishments are in the habit of distributing as Christmas gifts in the
form of cash bonuses, "gold pieces," and turkeys. Profit-sharing
does not even succeed in evoking any of the stimuli to efficiency
that Christmas gifts usually do — perfunctory "thank you" and
some additional good will to last until after New Year's Day. On
the contrary, no matter how large or small the amounts distributed
may be, the one-sidedness of the arrangement and its absolute
control by the employer make the participants feel suspicious lest
they do not get all they should. For entirely different reasons this
feeling of dissatisfaction and lack of confidence in the value of the
scheme appears also in the mind of the employer. Somehow or other
he cannot help feeling that from the point of view of greater profits
more satisfactory results could be obtained with less pretense and
annoyance, through improvements in working conditions and in-
creases in wages based upon the payment of bonuses for individual
efficiency.
What then is, after all, the raison d'etre of the existing profit-
sharing schemes, few though they may be? To this question the
following answers may be suggested :
I. The advertising value of the schemes, the very name of which
is high-sounding and appeals to the popular mind. The advertising
value of profit-sharing, it was said, was particularly great in mer-
cantile establishments which cater to the trade of working people,
such as grocery and department stores and mercantile institutions
1 Ci. W. Jett Lauck and Edgar Sydenstricker, Conditions of Labor in Amer-
ican Industries, New York (1917), PP- 357-363-
2 The same argument could, of course, be advanced against participation in
the profits by employees who do not directly assist in the management of the
business.
2 6o TRADE UNIONISM AND LABOR PROBLEMS
selling their goods on the installment plan. Managers of two such
establishments were certain of the beneficial value of their profit-
sharing plan in this respect.
2. The nature of some business organizations, under which it is
difficult to correlate directly individual efficiency with its corre-
sponding reward. The value of this factor to the employer was clearly
brought out by the vice president of the Executives' Club of Detroit
in an article entitled, "Where Profit-sharing Fails and where it
Succeeds." The author says : " Considered merely as a stimulus to
increased production and greater net gain, profit-sharing is of par-
ticular value in plants where ( i ) individual efficiency cannot yet be
exactly measured, or where (2) much work is done far away from
supervision, or where (3) longevity of service is necessary to preserve
the quality of the product or to guard trade secrets, or where (4) a
supplement to the wage system promoting individual efficiency is
needed to minimize plant waste." ^
3. The effect of the schemes upon the labor turnover. Profit-
sharing, particularly in the establishments in which the business is
prospering and in which distributions are made at regular intervals,
does seem to have a beneficial influence upon the stability of the
organization. One profit-sharing employer, who made a very care-
ful study of the effect, of his plan, describes this effect as follows :
"It [profit-sharing] works precisely like an increase in wages, but
is more valuable because the employee, in order to receive his share,
has to wait till the end of the distribution period, a fact that makes
him hesitate before quitting, which would naturally involve the
forfeiting of his share in the profits."
4. The momentum of some of the older plans which makes profit-
sharing a sort of tradition which is difficult to abandon.
5. The sense of social justice of some employers. To this factor
is due the existence of three profit-sharing schemes the principal
object of which was stated to be "an equitable distribution of
the profits of the undertaking, as a matter of justice, irrespective
altogether of hopes for increased efficiency."
6. The belief of some employers that profit-sharing will develop good
will, diminish industrial strife, and stimulate efficiency, obviating at
the same time, perhaps, the necessity of granting increases in wages.
^System Magazine, March, 1916.
PROFIT-SHARING IN THE UNITED STATES 261
An examination of the causes specified by employers as having been
responsible for the abandonment of profit-sharing plans that they are
known to have had in operation reveals the interesting fact that
many of the plans were discontinued because the new order of things
failed to appeal to the prospective beneficiaries, who preferred the
certainty of ordinary increases in wages to the uncertainty of the
potential profits at the end of the distribution period.^ Demands on
the part of the new partners for increased wages usually appeared
unreasonable and unfair to the employer, who quickly decided to
abandon the scheme. One student of this question has summarized
the nature of profit-sharing in its bearing upon this conflict of opinion
as follows :
It is obvious that if profit-sharing is based upon favor, the so-called
divisions of profits are nothing more nor less than Christmas presents
or other periodical gifts and therefore cannot be considered as a
serious economic factor.
If profit-sharing is predicated upon the mutual rights and obliga-
tions arising out of relation of employer and employee, or if it is
based upon some equitable right or obligation flowing out of that
relation, it is then permitted to ask at what point in that relation,
or under what circumstances, does the right to demand an increased
wage cease and the right to demand a share of profits begin?
Unless there is some method of general application by which that
point may be established, it comes down to this, that the employer,
and he alone, can say when, to what extent, and under what cir-
cumstances the employee shall be permitted to exercise his supposed
right — an arrangement which not only makes the employer the um-
pire but permits him to change the rules in the middle of the game.^
One cannot help but feel that the illogical character of profit-
sharing, as outlined briefly in this article as well as by the authors
quoted, presents one of the reasons why genuine profit-sharing plays
such a negligible role in the wage systems of advanced industrial coun-
tries. The effectiveness of any economic arrangement does not
necessarily depend, of course, upon its power to appeal to logicians
or jurists. Profit-sharing has failed to become of any consequence
among the other wage systems for the simple reason that it has failed
to appeal to the instinct of economic self-interest of capital and
lU. S. Bureau of Labor Statistics, Bulletin No. 208 (1917), p. 166.
2Frands X. Butler, article in "Profit-Sharing by American Employers,"
National Civic Federation, Welfare Department, Report, pp. 258-259.
262 TRADE UNIONISM AND LABOR PROBLEMS
labor and because its tendency to increase efficiency and profits, on
the one hand, or appreciably to augment the earnings of the em-
ployees on the other, has been very limited.
Earnest advocates of profit-sharing may take exception to these
conclusions. They may state that the failure of profit-sharing to
make any appreciable headway among other wage-payment systems
is due to the fact that it is being operated under unfavorable con-
ditions. President Eliot may rightly emphasize the point that the
elements or ",adjuncts" which he considers as essential to the success
of profit-sharing, such as large distributions, welfare work, pensions,
sale of stock to employees at reduced rates, and "cooperative manage-
ment,"^ are seldom found in conjunction with the existing profit-
sharing plans. This is substantially correct. The report of the Federal
Bureau of Labor Statistics referred to above shows that almost three
fourths of the plans distributed shares equivalent to less than lo per
cent of the ordinary earnings of the beneficiaries ; that is, amounts
not sufficiently large in the opinion of President Eliot ^ to affect the
efficiency and develop a sense of partnership on the part of the em-
ployees. Although many of these establishments are known to be
engaged in some sort of welfare work, few of them are large enough
and financially stable enough to install and maintain pension funds.
Many of the profit-sharing firms are small and have no marketable
stock to sell to their employees. And, as brought out in the preceding
pages, very few profit-sharing employers manifest any great interest
in what President Eliot terms cooperative management. The absence
of some of the factors thought of as essential to the success of profit-
sharing raises the question as to the reasons for this absence. And,
as far as one may judge correctly from the opinions of numerous
employers, the answer to this question is: genuine profit-sharing —
that is, profit-sharing not related directly to individual efficiency —
does not pay.
Boris Emmet
iDr. Charles W. Eliot, "The Road to Industrial Peace," The Nation's Busi-
ness, August, 1917, p. 16. ^Ihid.
XX
PROFIT-SHARING IN THE BAKER MANUFAC-
TURING COMPANY^
THE year 1893 was a bad year. It was the year of the panic. Our
employees did not earn their dividend, nor did they earn it the
next year. In the spring of 1894 it was very difficult to keep running
Money was difficult to borrow, collections were poor, and orders
scarce. Common labor in those days commanded $1 a day. Concerns
about us cut wages, and we decided that the only way to keep
going was to cut wages. We called the men together and announced
a cut. They did not like it. We asked the men to come together with
us and try to devise some method of profit-sharing for the future, but
they were hot interested in sharing profits with a concern that had no
profits to share. As time went on, profits again- appeared and the
year 1897 ^^ particularly prosperous, and in the spring of 1898 we
declared an extra 10 per cent dividend.
At each of the annual meetings the matter of profit-sharing was
brought up. Nothing was done, however, until the spring of 1899.
Then the president, Mr. Almeron Eager, came out and said he was
willing to share profits. He said, " The Bakers have made a success of
the business, and if they want profit-sharing, I for one am willing
that they should have it."' The other stockholders agreed, and a lib-
eral form of profit-sharing was devised. They decided to become
authorized to issue $300,000 of stock: $200,000 to be preferred and
issued to the old stockholders for their old stock, two shares of the-
new for one share of the old; the other $100,000 to be common
stock and issued in profit-sharing as profits were earned.
At this time they had $208,000 of net assets, $8000 in excess of
the new preferred, and they decided that to get the good will of the
men they would pay them a 10 per cent cash bonus on their past.
iProm an address before the Second Annual Industrial Service Conference,
Milwaukee, Wisconsin, April 28, 1919.
263
2 64 TRADE UNIONISM AND LABOR PROBLEMS
year's wages, and any small amount left over would be paid to the
stockholders as an extra dividend. The men were called together.
There was one fellow who refused to come and advised some of his
fellow men not to come. He told them, "They are only going to
cut wages again."
At the meeting the men were paid a lo per cent cash bonus on their
past year's wages and told that in the future the Company would
share its profits liberally with them. They were very much surprised.
It was explained that an inventory would be taken each year, and
if after paying the regular s per cent dividend on all stock there
should be a gain, lo per cent of it was to be put into a sinking fund
and the rest divided between preferred stock and employees in pro-
portion to the earnings of each. Employees in this case meant all
persons in the employ of the Company at the factory for over two
years, managers as well as laborers and mechanics.
If the employees should receive during the year $30,000 wages
and preferred stock $10,000 dividends, then the division was to be
between the employees and preferred stockholders as thirty to ten.
Three fourths of the gain after setting aside the sinking fund would
go to employees and one fourth to preferred stockholders. This
meant we capitalized labor at twenty times its earnings.
The first year went by, and we figured up and found we had 60 per
cent to add to preferred dividends, bringing our total dividends up
to 8 per cent, and we had 60 per cent to add to employees' wages.
These amounts were not paid in cash ; only 15 per cent was paid in
cash and the other 85 per cent in common stock.
The directors had decided that it would be the policy of the Com-
pany not to buy the stock. They did not wish to draw cash out of
the business by buying the stock ; they wished to buy labor-saving
machinery, enlarge their plant, and put themselves in better shape to
compete. But there was one fellow who wanted to sell. He had three
or four shares, and the president said, "It is common to look upon
common stock as watered stock, and we want to show these fellows
that it is really worth something and has $100 of real value back of
it." He moved that in this case we buy in the stock at par. We made
the offer and it was accepted, and the man was very much pleased.
We continued year after year. The percentages added to preferred
dividends and to employees' wages during the first eight years ran
THE BAKER MANUFACTURING COMPANY 265
like this: January, 1900, 60; 1901, 82 ; 1902, 74; 1903, 98; 1904,
69 ; 190S, 28 ; 1906, 81 ; 1907, 120.
It was soon apparent that there would be stock continually coming
on the market. The men organized themselves and tried to buy it as
fast as it was offered. They wished to keep hold of it, and they wished
to maintain the price at par. At first they were successful, but it
soon came faster than they could take care of it and the price de-
clined. It went down and down until it struck a level of about $65
a share.
The stock that was sold went largely into outside hands; and
during this interval several of the preferred stockholders (original
stockholders) died, and their stock went into the hands of their heirs.
These outside stockholders and heirs began to feel that they wanted
a larger share in the profits, and they set about to get it. Their plan
was to get the employees to vote down profit-sharing. They told the
employees that if they would stop sharing profits, the stock would
return to par. They also offered as an inducement a 20 per cent
increase in wages and higher dividends. They failed, and profit-
sharing continued.
But by this time we had plenty of capital, and there was a profit
in the purchase of stock below par, so we decided to change our
policy in regard to buying stock. Up to this time there had been no
restrictions on the stock. Employees could sell to whomever they saw
fit. Since the change in our by-laws in 1909 the stock has been
issued only on the condition that it be left on deposit with the Com-
pany under contract to sell to the Company at the market price
whenever the shareholders wish, and whenever we have sufficient
funds in our stock-purchase fund. The Company has the privilege of
buying the stock when the owner goes to work for a competitor, when
he goes into business for himself, or when he has worked for another
for five years. If he remains with the Company until he retires, the
Company cannot buy the stock without the owner's consent.
The market price of stock is determined by averaging the price of
the last hundred shares sold. One of the principal elements deter-
mining the market price of stock is the sale of what we call "stub
shares." The amount of stock apportioned to honorary employees
cannot be measured in full shares of $100 each. There are frac-
tional amounts left over ; these stubs are combined into whole shares
266 TRADE UNIONISM AND LABOR PROBLEMS
and sold at the annual meeting. Each ownjer of a stub is entitled to
bid for these shares ; the man who bids the highest gets the share or
shares he bids for at the price bid, and so on until all the shares
are sold.
At first the stock was nearly all bought by preferred stockholders
or by some of the better-paid employees, and it usually went about
$6s a share, but as time went on, it increased in value until at the last
annual meeting it sold for a little over $80 a share, and at this time
it went into many hands. There were only three men who succeeded
in getting more than one share.
We used to give 15 per cent in cash and 85 per cent in stock. We
now give only 10 per cent in cash and 90 per cent in stock. What
we used to call profit-sharing we now call remaining wage and extra
preferred dividends. During recent years we have had the following
results: January, 1908, 100 per cent; 1909, 78; 1910, 100; 1911,
ICO ; 1912, 47 ; 1913, 75 ; 1914, 7° ; 191S, 9° ; 1916, 50 ; 1917, 70 ;
1918, 100. And this January again another 100 per cent. The
average of all these figures is 80 per cent ; that is, we have added to
preferred-stock dividends during the twenty years 80 per cent an-
nually, and we have added to our employees' basing wage 80 per
cent annually. . . .
Some of you may wonder why it is that we could do this, and I
will admit that when I say the average percentage has been 80 per
cent, it is somewhat misleading. Not all of our employees receive
this remaining wage each year, only those who have become honorary
employees ; that is, worked 4500 hours. If we had divided the
same amounts among all of our employees, it would have resulted in
about 64 per cent average in place of 80 per cent ; and we do not
figure these percentages in every case on our employees' actual wages.
We do with the office employees and dayworkers, but not with piece-
workers. In their case we base it on the wages they would have
received had they worked daywork instead of piecework. At piece-
work they usually earn about 25 per cent more than they do at day-
work. Had we divided with our pieceworkers on their actual wages,
it would have cut the percentage from 64 to about 55 per cent.
Again, if we had gone out in the open market for our capital, we
would have had to pay 6 to 7 per cent for it, whereas we only pay
S per cent on our common stock.
THE BAKER MANUFACTURING COMPANY 267
Then, there has been a profit in the purchase of our stock at less
than par from the people who have left our employ. We have been
purchasing it at the market, which has varied all the way from
65 to 80 per cent of par.
Taking all these things into consideration, it probably would have
reduced the average percentage to about 45 or 50 per cent. That is
to say, had the division been with all our employees and on their
whole weekly wages, and had we paid 7 pei* cent for all our capital
and bought no stock at less than par, our average percentage would
have been about 45 or 50 per cent. Where has it come from?
Some may perhaps think we have not done the fair thing by our
preferred stockholders, or that we have perhaps paid a small weekly
wage in order that we might pay a large remaining wage at the end
of the year- Let us see what we have done for our preferred stock. I
can remember, on several occasions before we went into this, some of
the original stockholders wanted to sell, but they couldn't find a buyer.
There was really no market for their stock, and when we first started
there was only $100 of property back of each share of preferred ; but
as time has gone on this amount has increased, and today there is be-
tween $700 and $800 to earn the dividend on each share of preferred.
It is to some extent invested in bonds, and the income on these bonds
alone is sufficient to pay the preferred-stock dividend two or three times
over. So we have increased the security of preferred stock enormously.
The Company has a standing offer to buy preferred stock at $140 a
share, and besides this we have paid preferred for the past twenty
years an average annual dividend of 9 per cent. Roughly, 6 per cent
of this 9 per cent has been paid in cash, the rest in common stock.
Then, as to what we have done with labor. I have investigated on
numerous occasions to find out whether we were paying competitive
wages. I will mention but two things. The United States Depart-
ment of Commerce and Labor published a bulletin. No. 57, applying
to the year 1905. In that bulletin they stated that the average wage
for windmill manufacturers for the year was $503. The average of
the Baker employees for the year was $561. The output of the
windmill manufacturers of the nation was $2486 per employee. The
output for our employees was $3400. Bulletin No. 75, applying to
the same year, stated that the agricultural-implement concerns on
the average paid $539, and the average output per man was $2347.
268 TRADE UNIONISM AND LABOR PROBLEMS
Now, where does it come from ? It is my belief that this is largely
the result of increased production due to increased effort and intelli-
gence of our men, and that if you destroy this remaining-wage
scheme this production would not continue.
I believe the overhead per man is less where the men have an in-
centive such as we have offered. To illustrate: Suppose a barber
running one chair has an income of $8 per day, and his expenses are
I4. He has made for himself $4. And supposing he should decide
that he is going to put forth every effort and increases his output
10 per cent. The income would then be $8.80, the expenses would
remain the same, and he would have $4.80 for himself. Or with a
10 per cent increase in output, he has made 20 per cent increase in
earnings. You have heard it said that a rented house needs more
repairs and depreciates faster than a house in which the owner
lives. I can remember that my mother used to say that a hired
girl would often prove practically worthless and be inattentive and
let her work go, but as a rule the same woman after she married
and had a house of her own would be a good housekeeper and
become thrifty.
We had an experience which I wish to relate. Some eighteen years
ago we wished a galvanizing plant. We contracted with an expert
galvanizer to come to our plant and do our galvanizing on a ton
basis. The contract was drawn up in such a way that we were to
know his cost, and at the end of four years it was our privilege to
buy him out. We did, but kept his men, giving them the same wages
that he had paid them, but we told them that if they would make
the cost of galvanizing less than it had been, we would share liberally
with them. And they did ; they made the cost less under those con-
ditions than they had when one man, the foreman, got all the benefit
of the increased production. . . .
These remaining wages separate us from some good men, but this
would be natural, for every man wants to be his own boss. It fur-
nishes them with capital with which to go into business, and we have
had a number of valuable men leave us, whereas if they had not had
the capital they could not have left us. Quite a number of men have
sold their stock to make their first payments on farms. Three or four
years ago I was up in the Lake Superior country, and between trains
my wife and I stopped off at Chetek to see an old schoolmate of hers,
THE BAKER MANUFACTURING COMPANY 269
who lived in the country. On the way the schoolmate pointed out five
different fanners who had got their start from the sale of our stock.
Our turnover for a number of years prior to 1917 averaged 24 per
cent ; for the year 1917, 50 per cent ; for the year 1918 it was 60 per
cent. We carry our own employees' liability insurance. It has aver-
aged for seven years past 25 cents per $100 pay roll. Forty per
cent of our employees own their own homes ; 28 per cent own auto-
mobiles; more than half our capital is owned by our employees.
I think that capital should be in the hands of those persons who will
make it serve the people best ; that is, who will make it do the greatest
good to the greatest number. Our capital is going into the hands of
those persons who have served the longest and held the most impor-
tant positions, and I trust they will handle it more wisely than would
parties who were not so familiar with the business nor so vitally
interested in it.
Cooperative societies are often a side issue, the owners' livelihood
is not gained through them; to a large extent they are everybody's
business. With us cooperation is our principal business, our bread
and butter. Whatever we can save or produce more than workmen
usually produce is ours.
Our board of directors is composed of our foundry ' foreman,
windmill-machine-shop foreman, superintendent, buyer, cost account-
ant, and myself. On the afternoon of the annual meeting we close
the shop and hire the city hall for the meeting ; most of the employees
attend and are interested in knowing the Company's business affairs.
It seems to me that this is much better than to have the capital
owned almost wholly in Chicago or New York, financial matters
largely a secret from the employees and neither capital nor labor
really knowing the other fellow's side. If you separate capital too
completely from labor, the conditions become unstable.
I believe that if, in ordinary times, any corporation will get the
good will of its employees and tell them that the stockholders in the
future will be paid the average amount the stock has earned (say for
the past five years), and any amount which the Company earns in
addition to this will be divided among the employees, the amount
which will be coming to the employees will be surprising.
John S. Baker
President, Evansville, Wisconsin
XXI
A PLAN FOR COLLECTIVE BARGAINING AND
COOPERATIVE WELFARE^
A GLANCE BACKWARD
AT THE close of the year 1910 the former management of the
l\ Philadelphia Rapid Transit Company found itself bankrupt in
cash. It had also lost the confidence of its employees and of the
public.
The $30,000,000 paid in by the stocldiolders in payment of their
stock had been spent, together with all other money which the
management could secure by mortgage and other means.
In 1909 and 19 10 the earnings had not been sufficient to pay the
operating costs, rentals, and interest by over $1,500,000. — to say
nothing of earning a return on the $30,000,000 paid in by the stock-
holders, who had then gone nearly eight years without receiving any
return upon their money.
Nearly three fourths of the cars in service were of the old four-
wheel tjpe, together with. the rebuilt horse cars (known as "cuts").
There was little protection and no comfort while riding on these cars,
either for the men or the public.
Accidents had increased to an alarming extent, caused by unfit
equipment and the general unrest of the men, who, after experiencing
two serious strikes in 1909 and 19 10, were, in a dissatisfied way,
working under the terms of a wage settlement provided as the result
of arbitration.
The maximum wage of conductors and motormen in 191 1 was
23 cents, and this maximum rate was to be increased one-half cent per
hour on July i of each year until 1914, when the high rate for men
over five years in service was to be 2 5 cents per hour.
In this emergency Mr. E. T. Stotesbury was petitioned by
the stockholders to take charge of the management and save the
1 Publication by Philadelphia Rapid Transit Company, 1918.
270
PLAN FOR COLLECTIVE BARGAINING 271
situation. Mr. Stotesbury undertook this thankless job, without pay,
and engaged Mr. T. E. Mitten to represent him in the management
of the property.
The public was made satisfied with promises, which have since
been faithfully met.
The stockholders were told that they must still wait for any return
upon their $30,000,000 until both men and public had been accorded
fair treatment.
The condition of the Company was explained to the men, and it
was pointed out that it would be impossible for the Company to
survive if it increased the proportion of its earnings then being paid
to its conductors and motormen, which approximated 22 cents
out of every dollar received by the Company in fares from
passengers.
A promise was made by Mr. Mitten at this time, 1911, that if the
men would cooperate under a plan by him set forth, 22 cents out of
every dollar received by the Company in fares from passengers would
be set aside in a fund to be used for payments to conductors and
motormen. Mr. Mitten stated that, in this event, the maximum
wage attained by the close of a five-year period, July, 1916, would,
in his opinion, be not less than 28 cents per hour.
It was in August, 191 1, that the Cooperative Plan was adopted by
the Stotesbury management and accepted by vote of the men in
November of the same year.
The Cooperative Plan has well stood the test of over seven years'
vicissitudes. Through its agency mutually satisfactory working con-
ditions have been established and maintained.
The public have had a continuity of service, as against the strike
conditions previously prevailing, and over $16,000,000 has been
spent for new cars and other improvements. During the year ended
June 30, 1918, 741,140,866 passengers were carried at an average
fare of 3.96 cents per passenger as against 432,884,253 passengers
carried at an average fare of 4.15 cents per passenger during the
year ended June 30, 1910.
The men actually received 31 cents per hour at the close of the
five-year period, 19 16, as against the 28 cents originally estimated,
and this was increased as of July 15, 1918, to 43 cents per hour as
a result of the workings of the Cooperative Plan.
2 72 TRADE UNIONISM AND LABOR PROBLEMS
Prior to the recent raise to 48 cents per hour (to accord with the
National War Labor Board Scale) the Cooperative Plan had pro-
duced an increase of 20 cents per hour in maximum pay, amounting
to $5,368,153.18 more in this period than the men would have re-
ceived under a continuation of the strike-settlement scale. This is
the greatest increase of ivages obtained in any. American city during
this period.
Greater advantages in sick and death benefits were assured.
Improved working, conditions and modern devices for controlling
the mechanism of the cars were installed, to which the men responded
by cutting the number of accidents in half.
The principle of the Cooperative Plan, as originally established,
that is, that employees may belong to any union or other organization
without " let or hindrance," has proved to be the rock of its depend-
ence and the disarming of its opponents. Of the two attempted
strikes, neither proved effective in causing serious interruption to
service. The attempt in the present year was so timed as to take
full advantage of the depleted force occasioned by the draft require-
ments of the government. It afforded the most striking demonstra-
tion of the effectiveness of cooperative effort between the Company
and employees, in that the cars necessary to provide the extra service
to war workers were at once manned and operated for several weeks
by volunteers from all departments of the Company, so effectively
that when called upon to answer the complaint made to the War
Labor Board at Washington the management was able to prove by
the representatives of the shipyards, arsenals, etc. that service had
not been interrupted and was being adequately supplied. As a- con-
sequence the War Labor Board dismissed the complaint, following
our voluntarily undertaking to adopt the wage scale then being
established by the War Labor Board to govern the cities of Chicago,
Cleveland, Detroit, and Buffalo, and our further undertaking to
give the objecting employees opportunity of continuous employment
during good behavior.
The investigation of the War Labor Board, and the cross-exami-
nation of those of us who appeared as representing the Cooperative
Plan, brought out certain points in the plan there shown as capable
of being misrepresented and misunderstood. This, together with the
PLAN FOR COLLECTIVE BARGAINING 273
abolition of the 22 per cent fund, the establishment of the War Labor
Board basis for the new wage scale, and the apparent desirability of
a broadening and enlargement of certain features of the plan, made
necessary the preparation of an amended plan, which has been sub-
mitted to the employees, by means of United States mail, in such a
way as to present the opportunity for examination and decision under
influence of the home and counsel of the family.
The stockholders received a total of $2,847,933.50 in dividends,
and a 5 per cent dividend rate has been established. They have
also a greatly improved condition of their property, including the
equity of the undistributed surplus income accumulated under this
management.
The Cooperative Plan has thus demonstrated what can be accom-
plished where both men and management strive together for one
common purpose.
A LOOK FORWARD
The Stotesbury-Mitten management, as a result of the past seven
years' experience, now presents the following statement of policy and
practice, which it is proposed shall hereafter cover the joint undertak-
ings of the men and the management in the way of cooperative effort.
The principle of the Cooperative Plan of 191 1, that is, that em-
ployees may belong to any union or other organization without "let
or hindrance," is hereby ratified and confirmed ; it being understood,
however, that in the interest of service to the public the rules of the
Company must be obeyed.
Satisfactory service insures continuous employment with the Com-
pany. In the event of there being such a decrease in the business
of the Company as makes it necessary to reduce the force, those
giving the least satisfactory service shall be the first to be dropped
from the pay roll of the Company.
There shall "be no discrimination against employees who, for
any reason, do not become members of the Cooperative Welfare
Association.
Cooperative effort is recognized as the keystone of all accomplish-
ment in rendering proper service to the public, and good service will
be recognized by such advancement as opportunity offers.
2 74 TRADE UNIONISM AND LABOR PROBLEMS
Wages
The War Labor Board, in its wisdom, determined upon an advanced
wage for employees of street railways. This management, in agree-
ment with the Cooperative Committee, advanced the wages of its
trainmen another 5 cents, to a maximum of 48 cents per hour, and
has adjusted the wages of its other employees accordingly. This at
once brings all employees upon a proper comparative basis and, by
averaging the wage scales of the other cities of the first class under
the jurisdiction of the War Labor Board, namely, Chicago, Cleve-
land, Detroit, and Buffalo, gives us a permanent basis upon which
to adjust the wages of the employees in each of the departments
from time to time as occasion may warrant.
This new basis makes unnecessary the longer continuance of the
22 per cent fund and opens the way to a broadening of the Cooper-
ative Plan to include all employees of the Company upon equally
favorable terms.
The original Cooperative Plan, covering the payment of sick bene-
fits, now provides insufficiently in amount and imperfectly in time
and method of payment. The first plan of death benefits and of
pensions became inadequate and subject to much improvement.
Therefore, we must now devote our energies to enlarging the scope
of the Cooperative Welfare to include all employees one year in
service, and to increase and improve sick benefits, death benefits,
and pensions.
The government has been good to us in various ways. The War
Labor Board has dismissed the complaint of those who were desirous
of destroying our efficiency. The Emergency Fleet Corporation and
the Bureau of Industrial Housing and Transportation have ad-
vanced us millions of dollars with which to buy new cars and other
equipment.
The stockholders have permitted us to increase 'wages of train-
men more than $5,000,000 over the amount which the men would
have received under the 1910 strike-settlement scale. The stock-
holders themselves have received less than $3,600,000 during the
seven years, as a return upon their $30,000,000 of invested capital,
and have now again let us advance wages to meet the needs of the
men, and this without knowing where the money is coming from.
PLAN FOR COLLECTIVE BARGAINING 275
The bounden duty of the men and the management under these
circumstances is to do their level best to cut Out all Wasted effort.
Man power and fuel can be thereby saved. By helping the govern-
ment to conserve these most essential things we will not only be doing
our patriotic duty but in addition will be doing all in our power to
hold down our rates of fare to the lowest possible point consistent
with the following :
1 . Efficient service to the public.
2. Payment of adequate wages.
3. Proper protection of invested capital.
Compensation foe I]:jjuries 1
The Company will continue to pay the compensation as determined
under the Workmen's Compensation Act for injury to employees
resulting in :
1. Total temporary disability.
2. Partial (permanent or temporary) disability.
3. Limited number of serious dismemberments. ,
4. Total permanent injuries.
5. Fatal injuries.
The period and amount of compensation are determined under
this act in accordance with the disability sustained.
Amended Pi^n
The Cooperative Plan of 191 1, redrawn to meet the changed con-
ditions, follows and will be known as the Cooperative Plan of 1918.
COLLECTIVE BARGAINING
Voice and Vote
1. The workers shall have a free and independent vote for repre-
sentatives for proper collective bargaining, and
2. Proper committee organization of such representatives, so that
class and group contact may be assured and the integrity of workers'
committees be established and maintained as such.
Procedure
The business of Employer is divided into classes, or departments,
and each department is subdivided into contact groups, or Branches.
i'jd TRADE XJNIONlSM AND LABOR PROBLEMS
Differences between Employee and Employer shall be settled
through the medium of
1. Branch Committees.
2. Department Committees.
3. General Committees.
4. Board of Arbitration.
Any local point of difference shall be taken up by the Branch
Committee at the local Branch of origin.
When a grievance is not settled through the proper Branch Com-
mittees, then it shall be taken up by the respective Department
.Committees.
When a grievance is not settled through the proper Department
Committees, then it shall be taken up by the General Committees.
When a grievance cannot be settled through the General Com-
mittees, it shall then be settled by arbitration.
All appeals shall be submitted in written form to the secretary of
the respective committees, briefly setting forth all the facts of the
matter at issue..
In the discussions of the Department Committees and of the
General Committees it is intended that Employees shall sit on one
side of the table, so to speak, and Employer on the other side,
throughout the collective bargaining contemplated by this plan.
The majority of any Committee of Employees shall be the voice
of that committee.
The majority of any Committee of Employer shall be the voice of
that committee.
Whenever the minds of the majorities of any committees meet,
the controversy shall be settled.
While it is intended that there shall be full and free discussion in
order to arrive at an amicable understanding and settlement of con-
troversies, whenever it is necessary to take a vote to ascertain the
voice of any committee, the committees for the employees and for
the employer shall have the right to retire and cast their vote in secret
caucus. In such secret caucus all such votes shall be taken by secret
ballot, said ballots to be returned unopened to the secretary for the
committees. The secretary shall count the ballots under the ob-
servation of both committees and announce the result in open
meeting.
PLAN FOR COLLECTIVE BARGAINING 277
Branch Committees
There shall be elected two representatives by the workers at each
depot, station, or division. The candidate receiving the highest vote
shall be declared No. i Branch Committeeman for that depot, sta-
tion, or division for the ensuing year, and the candidate receiving the
second highest vote, in like manner, shall be declared No. 2 Branch
Committeeman.
The employer shall appoint two representatives for each depot,
station, or division.
The two Committeemen elected by the workers shall constitute
the Branch Committee for Employees.
The two representatives appointed by the Company shall consti-
tute the Branch Committee for Employer.
Committeemen shall be elected to serve for the period of one
year. It shall be their duty well and truly to represent their fellow
employees and to give all matters under consideration or discussion
their best thought and the benefit of their knowledge and experience.
At least once in every three months there shall be an opportunity
for a meeting of workers at each Branch, when reports shall be
made by the local Branch Committeemen.
Elections
The dates upon which Committeemen elections shall be held, as
well as the hours during which the polls will be open, shall be so
arranged as to insure to every qualified voter at the local depot,
station, or division opportunity to cast a vote for one candidate, it
being stipulated that the different election dates shall be arranged
in such order and sequence as to provide always for a working
majority on the several committees of members who are familiar with
the nature and routine of the business transacted.
Notice of any Branch election shall be posted conspicuously at
the said local Branch twenty-one days in advance of the date set for
the election.
All elections for Committeemen shall be by secret Australian ballot
under the supervision and direction of an Election Committee of
three members chosen by and from the respective Department Com-
mittee for Employees.
2 78 TRADE UNIONISM AND LABOR PROBLEMS
All ballots cast, together with the official return of the Election
Committee, shall be forwarded promptly to the Secretary of the De-
partment Committee, to become a part of the permanent records.
In case of decease, leaving service, or inability to act of any
Branch Committeeman, the remaining Committeeman shall act until
a successor is elected. An election shall be held to fill the vacancy as
promptly as possible in the same manner as the original choosing
provided by this plan.
Qualifications for Voters
To qualify as a voter the employee must have been six months in
the Company's service, be regularly assigned to duty, and not occupy
an official position of any character with the Company. Every voter
shall be entitled to all the rights and privileges under this plan.
No voter shall be permitted to cast a ballot unless he or she shall
appear at the polls, in person and within the hours prescribed for the
election.
Lists containing the names of the workers qualified to vote at the
election shall be posted conspicuously at the local Branch three days
prior to the date set for the election.
Qualifications for Committeemen
Candidates, to be eligible to election as Committeemen, must be
regularly assigned to duty and have been continuously in the employ
of the Company for not less than two years.
In the Transportation Department candidates must also be as-
signed to a regular run and be actually serving in the capacity of
trainman or its equivalent grade.
Candidates for election as Committeemen must file with the
secretary of the General Committees, not less than thirteen days in
advance of the date of election, official nomination papers, carrying
the signatures of not less than seven workers qualified to vote at
the respective Branch location.
It as not intended that a worker shall sign more than one nomina-
tion petition at any election.
■It is not intended that any employee who may properly be said
to represent Employer shall be chosen as a representative of workers.
PLAN FOR COLLECTIVE BARGAINING 279
Department Committees
Employees in the several Departments shall be represented on thein
respective Department Committees through their duly elected
members.
The following Departments will each be represented by its respec-
tive Department Committee, namely:
Transportation Department.
Rolling-Stock and Buildings Department.
Electrical Department.
Way Department.
General Offices Department.
These Committeemen elected annually by the employees of each
Department shall be equaled in number by the Company appoint-
ments of its representatives* Each Committeeman shall be entitled
to a vote.
Each Department Committee for Employees shall consist of all;
No. I Branch Committeemen and all No. 2 Branch Committeemen
elected by the workers at the several depots, stations, or divisions in
that Department. In the event of decease, leaving service, or in-
ability to act of either Branch Committeeman, then the remaining
Branch Committeeman for that Branch shall act on the Department
Committee until a successor is elected in the manner hereinbefore
provided for filling a vacancy on a Branch Committee.
Officers
The Department Committee for Employees and the Department
Committee, for Employer shall each elect its respective chairman.
The secretary for the General Committees, or an authorized repre-'.
sentative; shall act as secretary for the several Department Com-
mittees, without vote.
- , ,■ . i
Meetings
Stated meetings of each Department Committee shall be held itf
alternate months throughout the year. Special meetings shall be held:
atUie.cali oT the secretary or upon the request 'of ^five members sub-:
mitted in writing to the secretary. -
2 8o TBIADE UNIONISM AND LABOR PROBLEMS
No less than two thirds of the members of any Department Com-
mittee shall constitute a quorum for the transaction of business at
♦any regular or special meeting of that committee.
General Committees
The members of each Department Committee for Employees shall
annually elect two of their number, the members so elected to consti-
tute the General Committee for Employees.
The members of the General Committee for Employees shall be
equaled in number by the Company's representatives, to be appointed
by the president of the Company, the members so appointed to con-
stitute the General Committee for Employer.
A vacancy occurring in the General Committees shall be filled as
promptly as possible in the manner of the original choosing.
It shall be the duty of the General Committees to devise ways and
means for furthering the efforts of the various Department Com-
mittees for the greatest possible good, to promote harmony and good
fellowship among all employees of the Company, to formulate plans
for submission to the several Department Committees, and to render
every assistance within their power toward advancement of the in-
terests of the employees and the betterment of the service.
Further, the General Committees shall possess the power to review,
modify, or reverse any findings or decision of the Department Com-
mittees, and may, in their judgment, change any portion of this plan
or any modification thereof or the composition of any of the com-
mittees, or any of their various respective functions.
The scope and authority of the General Committees shall be su-
perior to that of the Department Committees, and their decisions in
all matters shall be final and binding, except as hereinafter provided.
Officers
The General Committee for Employees and the General Committee
for Employer shall each elect its respective chairman. The secretary
for the General Committees shall be appointed by the president of
the Company, and shall not be entitled to vote. It shall be the
duty of the secretary to keep accurate minutes of meetings of all
PLAN FOR COLLECTIVE BARGAINING 281
committees. For this purpose an assistant secretary shall be em-
ployed to assist in keeping the minutes and conducting the details
of the several committees.
Meetings
Stated meetings of the General Committees shall be held on the
third Tuesday of each month.
Special meetings shall be held at the request of the chairman of
either of the General Committees, submitted in writing to the
secretary.
No less than two thirds of the members of each General Committee
shall constitute a quorum for the transaction of business at any
regular or special meeting.
Board of Arbitration
If resort to arbitration becomes necessary, then there shall be
an arbitrator chosen by the General Committee for Employees and
an arbitrator chosen by the General Committee for Employer, the
two arbitrators so chosen to select a third arbitrator. Failing unan-
imous decision, the decision of any two of these arbitrators shall
be binding.
In the event that the arbitrator chosen by the General Committee
for Employees and the arbitrator chosen by the General Committee
for Employer are unable to agree upon a third arbitrator, theq the
provost of the University of Pennsylvania, the chairman of the
Public-Service Commission, and the president of the Chamber of
Commerce shall be requested to serve as additional arbitrators, or,
failing so to do, to appoint their own personal representatives to act
as such additional arbitrators. Failing unanimous decision, the
decision of any three of these five arbitrators shall be binding.
Compensation
The pay of members of the General Committee for Employees and
of all Department Committees for Employees while employed on
committee work shall be paid from the funds of the Cooperative
Welfare Association and shall be at the rate received by the respec-
tive employees at their regular occupations, and while so employed
they shall receive no pay from the Company.
282, TRADE UNIONISM AND LABOR PROBLEMS
The members of the General Committee for Employer and of all
Department Committees for Employer shall receive no compensation
from the Association for their services as Committeemen, but shall
receive from the Company the continuation of their regular pay as
Company employees.
Each arbitrator shall be paid from the funds of the Cooperative
Welfare Association, as compensation for his services, an amount to
be determined by the General Committees.
All expenses of any character incident to the carrying out of the
Cooperative Plan shall be paid, out of the funds of the Cooperative
Welfare Association — the same being represented in the amount of
the dues as paid in from time to time by the members of the Coopera-
tive Welfare Association and in thai sum of $10,000 per month paid
in by the Company.
COOPERATIVE WELFARE
Membership
Membership in the Coijperative Welfare Association is open to em-
ployees one year or over in service and over sixteen years of age,
without initiation fee ; $1 per month will be deducted from the pay
of each member, and said dues will entitle members to life insurance,
sick.benefits and pensions, as herein provided.
The Company during the period of this management has paid into
the various funds representing sick benefits, pensions, death benefits,
and other benefactions, at the rate of approximately $90,000 per
annum. Under the Cooperative Plan of 1918 the Company will
contribute a lump sum of $10,000 per month to the cost of carrying
out the conditions contained therein.
Should the income realized by the payment of $1 per month by
members and $10,000 per month by the Company be found insuffi-
cient to meet the expenditures of the Association, the dues of mem-
bers shall be increased sufficiently to prevent a deficit in the funds of
the Association, and no increase in the amount paid by the Company
shall be made until the total amount paid monthly by the members
equals the $10,000 paid monthly by the Company. Thereafter all
increases shall be borne equally by both. The Company, however,
PLAN FOR COLLECTIVE BARGAINING 283
will not reduce its minimum payment of $10,000 per month should
the present dues of $1 per month create a surplus in the funds of
the Association,
Life Insurance
A blanket policy has been issued by the Metropolitan Life Insur-
ance Company, insuring the lives of employees of the Company desir-
ing to avail themselves of this protection through the medium of the
Cooperative Welfare Association.
Certificates of Insurance providing for $1000 life insurance have
been delivered into the possession of each member of the Association,
to remain in full force and effect so long as the member continues in
the employ of the Company and retains membership in the Cooper-
ative Welfare Association.
This replaces the death benefit of $150 formerly paid under the
Cooperative Plan of 191 1, to which the members contributed 25 cents
per month, and also replaces the $500 given by the Company to
dependents of deceased employees who had been over two years in
its service.
The Metropolitan Life Insurance Company makes payment of
benefits and insurance under its policy direct to the beneficiaries of
the members of the Cooperative Welfare Association.
Each Certificate of Insurance for $1000 issued by the Metropolitan
Life Insurance Company, under the provisions of the blanket policy,
entitles the holder, upon leaving the employ of the Company, to re-
insure for the same amount with the Insurance Company without
medical examination, at rates based upon the member's then attained
age. Any such member subsequently returning to the employ will
again become eligible for reinsurance under the provisions of this
blanket policy.
A special feature of this Certificate of Insurance is a provision
that in case of total and permanent disability, occurring before the
member shall have attained sixty years of age, from causes arising
after the issuance of insurance, the insured will be entitled to receive
from the Insurance Company the $1000 covered by the policy in
monthly or yearly installments, as set forth in the Certificate of In-
surance for $1000 now in the possession of each member of the
Association.
284 TRADE UNIONISM AND LABOR PROBLEMS
Sick Benefits
Sick benefits are payable at the rate of $1.50 per day, commencing
with the eighth day's illness, for a period not to exceed one hundred
days in any consecutive twelve months.
This replaces the former sick relief of $1 per day for one hundred
days in any consecutive twelve months.
Pensions
Pensions of $40 per month are payable to incapacitated employees
who have reached sixty-five years of age and have been continuously
in the service for twenty-five years ; meritorious cases of long serv-
ice, but falling short of these requirements, to be given special
consideration,
This increases the former pension plan from $20 to $40 per month.
Administration
The affairs of the Cooperative Welfare Association shall be ad-
ministered by a Cooperative Council consisting of the combined
membership of the two General Committees for collective bargaining.
The administration of the Cooperative Welfare Association shall
be entirely separate and distinct from the function of collective
bargaining.
The Cooperative Council shall act as Trustees of Insurance for
the Cooperative Welfare Association and shall also authorize the
expenditure of all moneys, including payment of sick benefits.
The Cooperative Council shall also pass upon the issuance of In-
surance Certificates and the validity and merit of all applicants for
pensions.
The president of the Cooperative Welfare Association, who shall
also act as chairman of the Cooperative Council, shall be elected an-
nually from the membership of the Association by the majority
vote of all the members of the several Department Committees for
Employees.
The chairman of the Board of Directors and the president of
the Company shall be the honorary chairmen of the Cooperative
Council.
PLAN FOR COLLECTIVE BARGAINING 285
THE COMPANY
THE EMPLOYER
THE EMPLOYEE
BRANCH
COMMITTEES
BRANCH
COMMITTEES
DEPARTMENT
COMMITTEES
DEPARTMENT
COMMITTEES
GENERAL
COMMITTEE
GENERAL
COMMITTEE
COOPERATIVE COUNCIL
COiipERATIVE
WELFARE ASSOCtATION
ARBITRATOR
ARBITRATOR
ARBITRATION
THROUGH THE PUBLIC
PROVOST
I UMVERSnV OF KHNSVLVANIA
REPRESENTING
EDUCATION
CHAIRMAN
PUBUC SERVICE COMMISSION
REPRESENTING
SERVICE
PRESIOENT
CHAMBER OF COMMERCE
REPRESENTING
COMMERCE
Chart showing Organization
The secretary-treasurer of the Cooperative Council and the as-
sistant secretary-treasurer shall be appointed by the president of the
Company. The Association shall employ such other assistants as
may be required.
The Company's Auditing and Treasury Departments are to be
placed at the disposal of the Cooperative Council for the purpose of
keeping the accounts and safeguarding the funds of the Cooperative
Welfare Association.
286 TRADE UNIONISM AND LABOR PROBLEMS
COOPERATIVE PLAN ADOPTED
On August 19, 19 1 8, a personal letter signed by President Mitten
and approved by Mr. Stotesbury was mailed to each employee of the
Company, together with a booklet containing the provisions of the
amended Cooperative Plan (which included life insurance, sick bene-
fits, pensions, wages, and representation through the duly elected
committees), as well as a card whereon employees so desiring were
invited to express their approval of the same.
The response of the employees was prompt and general and
showed such an overwhelming majority in favor of the amended plan
as to insure its immediate success. A second letter was therefore
mailed on August 27 to all eligible employees, one year in the service,
inclosing an official application card for membership in the Associa-
tion which provided for certain information required by the Insurance
Company not contained in the original card.
The letter explained that a contract had been entered into with
the Metropolitan Life Insurance Company insuring for $1000 the
lives of all who became members of the Association, and also de-
scribed the various conditions governing the issuance of the Certifi-
cates of Insurance.
A further letter was sent to all eligible employees on September 6,
setting forth that under the terms of the contract with the Metro-
politan Life Insurance Company the insurance on employees who
mailed their application cards before midnight September 15 would
become effective when the card was mailed ; that insurance on em-
ployees who mailed their application cards after midnight September
15 and up to midnight September 30 would become effective when
the Certificate was issued, and that any eligible employee who failed
to mail his application card before midnight September 30 would
not be insurable unless able to perform the duties of his or her
position.
All of these communications were mailed to the homes of the
employees, so that they could be carefully considered by the em-
ployees and the members of their families.
At December i, 1918, there were 9073 employees eligible for mem-
bership in the new Cooperative Welfare Association, of which num-
ber the applications of 8399, or over 92 per cent are on file. The
PLAN FOR COLLECTIVE BARGAINING 287
deaths, owing to the ravages of the epidemic influenza, have been
unusually large, and this, together with the withdrawals from service,
have reduced the total by 267, leaving a net membership, as of
December i, of 8132.
The applications for continued membership very generally bear
the indorsement of the wife, who, in most instances, is named as the
beneficiary. The following statement of beneficiaries named in the
Certificates of Insurance as being entitled to receive the $1000 death
benefit is of interest :
Total Per Cent
• Number of Total
Wife and Children 6459 ^o %
Parents 861 10
Other Relatives 588 7
Estate, etc 224 3
Total 8132 100
Following the overwhelming indorsement of the plan by the em-
ployees of the Company, as evidenced by their applications for mem-
bership in the new Cooperative Welfare Association, the General
Committee, through its chairman and secretary, on October 21, 1918,
mailed to all employees a letter outlining the progress of the welfare
work and declaring the Cooperative Plan of 19 18 operative arid in
full effect as of that date.
XXII
WORKSHOP COMMITTEES^
SOME time ago I was asked to prepare a memorandum on the
subject of workshop committees, for presentation to the British
Association, as a part of the report of a special subcommittee study-
ing industrial unrest. The following pages contain the gist of that
memorandum and are now issued in this form for the benefit of some
of those interested in the problem who may not see the original
report.
I have approached the subject with the conviction that the worker's
desire for more scope in his working life can best be satisfied by giv-
ing him some share in the directing of it ; if not of the work itself,
at least of the conditions under which it is carried out. I have tried,
therefore, to work out in some detail the part which organizations of
workers might play in works administration. And believing as I do
that the existing industrial system, with all its faults and injustices,
must still form the basis of any future system, I am concerned to
show that a considerable development of joint action between man-
agement and workers is possible, even under present conditions.
Many of the ideas put forward are already incorporated to a
greater or lesser degree in the institutions of these works, but these
notes are not intended, primarily, as an account of our experiments,
still less as a forecast of the future plans of this firm. Our own ex-
perience and hopes do, however, form the basis of much here written,
and have inevitably influenced the general line of thought followed.
INTRODUCTION
Throughout the following notes it is assumed that the need is
realized for a new orientation of ideas with regard to industrial
management. It is further assumed that the trend of such ideas must
be in the direction of a devolution of some of the functions and
^Survey, Vol. XLI, 1918, Reconstruction Series No. i.
288
WORKSHOP COMMITTEES 289
responsibilities of management onto the workers themselves. These
notes, therefore, are concerned mainly with considering how far this
devolution can be carried under present conditions and the necessary
machinery for enabling it to operate.
Before passing, however, to detailed schemes it is worth consider-
ing briefly what the aims of this devolution are.
It must.be admitted that the conditions of industrial life fail to
satisfy the deeper needs of the workers, and that it is this failure,
even more than low wages, which is responsible for much of their
general unrest. Now the satisfaction to be derived from work depends
upon its being a means of self-expression. This again depends on the
power of control exercised by the individual over the materials and
processes used and the conditions under which the work is carried
out, or in the case of complicated operations (where the individual
can hardly be other than a " cog in the machine") on the willingness,
understanding, and imagination with which he undertakes such a
role. In the past the movement in industry in this respect has been
all in the wrong direction ; namely, a continual reduction of freedom,
initiative, and interest, involving an accentuation of the "cog-in-the-
machine" status. Moreover, it has too often produced a "cog"
blind and unwilling, with no perspective or understanding of the
part it plays in the general mechanism of production or even in any
one particular series of operations.
Each successive step in the splitting up and specializing of oper-
ations has been taken with a view to promoting efficiency of pro-
duction, and there can be no doubt that efficiency, in a material
sense, has been achieved thereby and the productivity of industry
greatly increased. This has been done, however, at the cost of
pleasure and interest in work, and the problem now is how far these
could be restored, as, for instance, by some devolution of manage-
ment responsibility onto the workers, and how far such devolution is
possible under the competitive capitalist system, which is likely to
dominate industry for many long years to come.
Under the conditions of capitalist industry any scheme of devolu-
tion of management can only stand provided it involves no net loss
of productive efficiency. It is believed, however, that even within
these limits considerable progress in this direction is possible, doubt-
less involving some detail loss, but with more than compensating
290 TRADE UNIONISM AND LABOR PROBLEMS
gains in general efficiency. In this connection it must be remembered
that the work of very many men, probably of most, is given more or
less unwillingly, and even should the introduction of more democratic
methods of business management entail a certain amount of loss of
mechanical efficiency, due to the greater cumbersomeness of demo-
cratic proceedings, if it can succeed in obtaining more willing work
and cooperation, the net gain in productivity would be enormous.
Important and urgent as is this problem of rearranging the ma-
chinery of management to enable responsibility and power to be
shared with the workers, another and preliminary step is even more
pressing. This is the establishing of touch and understanding be-
tween employer and employed, between management and worker.
Quite apart from the many real grievances under which workers
in various trades are suffering at the present time, there is a vast
amount of bad feeling, due to misunderstanding, on the part of each
side, of the aims and motives of the other. Each party, believing
the other to be always ready to play foul, finds in every move easy
evidence to support its bitterest suspicions. The workers are irri-
tated beyond measure by the inefficiency and blundering in organiza-
tion and management which they detect on every side, and knowing
nothing of business management cannot understand or make allow-
ance for the enormous difficulties under which employers labor at
the present time. Similarly, employers are too ignorant of trade-
unions affairs to appreciate the problems which the present "light-
ning transformation" of industry present to those responsible for
shaping trade-union policy ; nor is the employer generally in close
enough human touch to realize the effect of the long strain of war
work and of the harassing restrictions of personal liberty.
More important, therefore, than any reconstruction of manage-
ment machinery, more important even than the remedying of specific
grievances, is the establishing of some degree of ordinary human
touch and sympathy between management and men.
This also has an important bearing on any discussion with regard
to developing machinery for joint action. It cannot be empha-
sized too strongly that the hopefulness of any such^ attempt lies not
in the perfection of the machinery, nor even in the wideness of the
powers of self-government granted to the workers, but in the degree
to which touch and, if possible, friendliness can be established. It
WORKSHOP eOMMITTEES ' 291
should be realized, for instance, by employers that time spent on
discussing and ventilating alleged grievances which turn out to be
no grievances may be quite as productive of understanding and
good feeling as the removal of real grievances.
Passing now to constructive proposals for devolution of manage-
ment, the subject is here dealt with mainly in two stages.
Under Section I some of the functions of management which most
concern the workers are considered with a view to seeing how far
the autocratic (or bureaucratic) secrecy and exclusiveness which
usually surround business management, as far as workers are con-
cerned, is really unavoidable or how far it could be replaced by
democratic discussion and joint action. The conclusion is that there
is no reason inherent in the nature of the questions themselves why
this cannot be done to a very considerable extent.
Section II deals with the second stage referred to and considers
the machinery needed to make such joint action as is suggested in
Section I workable — a very different matter from admitting that
in itself it is not impossible! The apparent complication of such
machinery is doubtless a difficulty, but it is not insuperable and is
in practice less formidable than it seems at first sight. It must be
realized, however, that the degree of elaboration of the machinery for
joint working adopted by any particular industry or firm must be
in relation to the elaboration of the existing management system.
It would be quite impossible for many of the refinements of dis-
cussion and joint action suggested to be adopted by a firm whose
ordinary business organization was crude, undeveloped, and un-
systematic. This point is more fully dealt with in this section.
Section III contains a summary of the scheme of committees con-
tained in Section II, showing the distribution to each committee of
the various questions discussed in Section I.
SECTION I. SCOPE OF WORKERS' SHOP ORGANIZATIONS;
MANAGEMENT QUESTIONS WHICH COULD BE DEVOLVED,
WHOLLY OR IN PART
It is proposed in this section to consider the activities which or-
ganizations of workers within the workshop might undertake without
any radical reorganization of industry. What functions and powers,
usually exercised by the management, could be devolved onto the
292 TRADE UNIONISM AND LABOR PROBLEMS
workers, and what questions, usually considered private by the man-
agement, could be made the subject of explanation and consultation ?
The number of such questions, as set out in this section, may appear
very formidable, and is possibly too great to be dealt with except by
a very gradual process. No thought is given at this stage, however,
to the machinery which would be necessary for achieving so much
joint working, the subject being considered rather with a view to see-
ing how far, and in what directions, the inherent nature of the ques-
tions themselves would make it possible or advisable to break down
the censorship and secrecy which surround business management.
In the list which follows, ob\aously not all questions are of equal
urgency, those being most important which provide means of consul-
tation and conciliation in regard to such matters as most frequently
give rise to disputes ; namely, wage and piece-rate questions and, to
a lesser degree, workshop practices and customs. Any scheme of
joint working should begin with these matters, the others being taken
over as the machinery settles down and it is found practicable to
do so. How far any particular business can go will depend on the
circumstances of the trade and on the type of organization in
operation.
Though machinery for conciUation in connection with existing
troubles, such as those mentioned, must be the first care, some of
the other matters suggested in this section — for example, safety and
hygiene, shop amenities, etc. — should be dealt with at the earliest
possible moment. Such subjects, being less controversial, offer an
easier means of approach for establishing touch and understanding
between managers and men.
The suggestions in this section are divided into two main groups,
but this division is rather a matter of convenience than an indication
of any vital difference in nature. The suggestions are arranged in
order of urgency, those coming first where the case for establishing
a workers' shop organization is so clear as to amount to a right, and
passing gradually to those where the case is more and more question-
able. The fitst group, therefore, contains all those items where the
case is clearest and in connection with which the immediate benefits
would fall to the workers. The second group contains the more ques-
tionable items, which lie beyond the region where the shoe actually
pinches the worker. These questions are largely educational, and the
WORKSHOP COMMITTEES 293
immediate benefit of action, considered as a business proposition,
would accrue to the management through the greater understanding
of management and business difficulties on the part of the workers.
Questions in Connection with which Shop Organizations
would primarily benefit the workers
This group deals with those matters where the case for establishing
shop organizations, to meet the need of the workers, is clearest.
I. Collective bargaining. There is a need for machinery for
carrying this function of the trade-union into greater and more inti-
mate workshop detail than is possible by any outside body. A
workshop organization might supplement the ordinary trade-union
activities in the following directions :
a. Wages
(Note. General standard rates would be fixed by negotiation
with the trade-union for an entire district, not by committees
of workers in individual works.)
To insure the application of standard rates to individuals, to
see that they get the benefit of the trade-union agreements.
When a scale of wages, instead of a single rate, applies to a
class of work (the exact figure varying according to the ex-
perience, length of service, etc., of the worker), to see that
such scales are applied fairly.
To see that promises of advances (such as those made, for in-
stance, at the time of engagement) are fulfilled.
To see that apprentices, on completing their time, are raised to
. the standard rate by the customary or agreed steps.
b. Piecework Rates
(It is assumed that the general method of rate-fixing — for
example, the adoption of time study or other method — would
be settled with the local trade-unions.)
To discuss with the management the detailed methods of rate-
fixing, as applied either to individual jobs or to particular
classes of work.
Where there is an agreed relation between time rates and piece
rates as, for instance, in engineering to see that individual
piece rates are so set as to yield the standard rate of earning.
To discuss with the management reduction of piece rates where
these can be shown to yield higher earnings than the standard.
294 TRADE UNIONISM AND LABOR PROBLEMS
To investigate on behalf of the workers complaints as to in-
ability to earn the standard rate. For this purpose all the
data and calculations, both with regard to the original setting
of the rate and with regard to time-booking on a particular
job, would have to be open for examination.
(Note. It is doubtful whether a shop committee, on account of
its cumbersomeness, couldever handle detail, individual rates,
except where the jobs dealt with are so large or so standard-
ized as to make the number of rates to be set per week
quite small. A better plan would be for a representative
of the workers, preferably paid by them, to be attached
to the rate-fixing department of a works, to check all cal-
culations and to look after the workers' interests generally.
He would report to a shop committee, whose discussions
with the management would then be limited to questions
of principle.)
c. Watching the Application of Special Legislation, Awards, or
Agreements; for example,
Munitions-of-war act, dilution, leaving-certificates, etc.
Recruiting, exemptions.
After-war arrangements, demobilization of war industries, res-
toration of trade-union conditions, etc.
d. Total Hours of Work
To discuss any proposed change in the length of the standard
week. This could only be done by the workers' committee
of an individual firm, provided the change were within the
standards fixed by agreement with the local union or those
customary in the trade.
e. New Processes or Change of Process
Where the management desire to introduce some process which
will throw men out of employment, the whole position "should
be placed before a shop committee to let the necessity be
understood and to allow it to discuss how the change may be
brought aboui with the least hardship to individuals.
/. Grades of Worker for Types of Machines
Due to the introduction of new types of machines, and to the
splitting up of processes, with the simplification of manipula-
tion sometimes entailed thereby, the question of the grade of
worker to be employed on a given type of machine continually
arises. Many such questions are so general as to be the
subject of trade-union negotiation, but many more are quite
local to particular firms. For either kind there should be a
works committee within the works to deal with their applica-
tion there.
WORKSHOP COMMITTEES 295
2. Grievances. The quick ventilating of grievances and injustices
to individuals or to classes of men is of the greatest importance in
securing good feeling. The provision of means for voicing such
complaints ^cts also as a check to petty tyranny and is a valuable
help to the higher management in giving an insight into what is
going on.
A shop committee provides a suitable channel in such cases as
the following :
Alleged petty tyranny by foremen.
Hard cases arising out of too rigid application of rules, etc.
Alleged mistakes in wages or piecework payments.
Wrongful dismissal ; for example, for alleged disobedience, etc., etc.
In all cases of grievances or complaints it is most important that
the body bringing them should be of sufficient weight and standing
to speak its mind freely.
3. General shop conditions and amenities. On all those questions
which affect the community life of the factory the fullest consultation
is necessary and considerable self-government is possible.
The following indicate the kind of question :
a. Shop Rules
Restriction of smoking.
Tidiness, cleaning of machines, etc.
Use of lavatories and cloakrooms.
Provision, care, and type of overalls.
Time-booking arrangements.
Wage-paying arrangements, etc., etc.
b. Maintenance of Discipline
It should be possible to promote such a spirit in a works that
not only could the workers have a say in the drawing up of
shop rules, but the enforcing of them could also be largely
in their hands. This would be particularly desirable with,
regard to
Enforcing good timekeeping.
Maintaining tidiness.
Use of lavatories and cloakrooms.
Promoting a high standard of general behavior, etc., etc.
c. Working Conditions
Meal hours, starting and stopping times.
Arrangements for holidays, etc.
Arrangement of shifts, night work, etc.
296 TRADE UNIONISM AND LABOR PROBLEMS
d. Accidents and Sickness
Safety appliances and practices.
Machine guards, etc.
Administration of first aid.
Rest-room arrangements.
Medical examination and advice.
e. Dining Service
Consultation re requirements.
Criticisms of and suggestions re service.
Control of discipline and behavior.
Seating arrangements, etc.
/. Shop Comfort and Hygiene
Suggestions re temperature, ventilation, washing accommoda-
tion, drying clothes, etc.
Provision of seats at work, where possible.
Drinking-water supply.
g. Benevolent Work
Shop collections for charities or hard cases among fellow
workers.
Sick club, convalescent home, etc.
Saving societies.
4. General social amenities. A works tends to become a center
of social activities having no direct connection with its work, for
example :
Works picnics.
Games; for example, cricket, football, etc.
Musical societies.
Etc., etc.
These should all be organized by committees of the workers and
not by the management.
Questions on which Joint Discussion would primarily be of
Advantage to the Management
In this group are those questions with regard to which there is no
demand put forward by the workers, but where discussion and ex-
planation on the part of the management would be desirable and
would tend to ease some of the difficulties of management. The
institution of works committees would facilitate discussion and
explanation in the following instances:
WORKSHOP COMMITTEES 297
1. Interpretation of management to workers. In any case of new
rules or new developments, or new workshop policy, there is always
the greatest difficulty in getting the rank and file to understand what
the management is "getting at." However well meaning the change
may be as regards the workers, the mere fact that it is new and not
understood is likely to lead to opposition. If the best use is made of
committees of workers, such changes, new developments, etc. would
have been discussed and explained to them, and it is not too much to
expect that the members of such committees would eventually spread a
more correct and sympathetic version of the management's intentions
aniong their fellow workers than these could get in any other way.
2. Education in shop processes and trade technic. The knowl-
edge of most workers is limited to the process with which they are
concerned, and they would have a truer sense of industrial problems
if they understood better the general technic of the industry in which
they are concerned, and the relation of their particular process to
others in the chain of manufacture from raw material to finished
article.
It is possible that some of this education should be undertaken
by technical schools, but their work in this respect can only be of
a general nature, leaving still a field for detailed teaching which
could only be undertaken in connection with an individual firm or a
small group of similar firms. Such education might well begin with
the members of the committee of workers, though if found feasible
it should not stop there, but should be made general for the whole
works. Any such scheme should be discussed and worked out in
conjunction with a committee of workers, in order to obtain the best
from it.
3. Promotion. It is open to question whether the filling of any
given vacancy could profitably be discussed between the management
and the workers.
In connection with such appointments as shop foremen, where the
position is filled by promoting a workman or "leading hand," it
would at least be advisable to announce the appointment to the
workers' committee before making it generally known. It might per-
haps be possible to explain why a particular choice had been made.
This would be indicated fairly well by a statement of the qualities
which the management deemed necessary for such a post^ thereby
298 TRADE UNIONISM AND LABOR PROBLEMS
■tending^ to head off some of, the jealous disappointment always in-
volved in such promotions; especially where the next in seniority is
not-taken. ^'v ; • ' - "
; It has of course+bieen urged, generally by extremists, that work-
men should choose their own foremen by election, but this is not
cpnsidered practical politics at present, though it may become possible
and desirable when Tvorkers have had more practice in the exercise
of self-management to the limited degree here proposed.
- One of the difficulties involved in any general discussion of pro-
motions is the fact that there are so many parties concerned and all
frpm a different point of view. For example, in the appointment of
a foreman the workers are concerned as to how far the new man is
sympathetic and helpful and inspiring to work' for. The other fore-
men are concerned with how far he is their equal in education and
technical attainments,. social standing, length of service; that is, as
to whether he would make a good colleague. The manager is con-
cerned; among other qualities, with his energy, loyalty to the firm,
and ability to maintain discipline. Each of these three parties is look-
ing for three different sets of qualities, and it is not often that a candi-
date can be found to satisfy all. Whose views, then, should carry
most -weight— the men's, the other foremen's, or the manager's?
It is quite certain, however, that it is well worth while making
some attempt to secure popular understanding and approval of ap-
pointments made, and a worker's committee offers the best oppor-
tunity for this.
"It would be possible to discuss a vacancy occurring in any grade
with all the others in that grade. For example, to discuss with all
shop foremen the possible candidates to fill a vacancy among the
foremen. This; is probably better than no discussion at all, and the
foremen might be expected, to some extent, to reflect the feeling
among their men. Here, again, the establishing of any such scheme
might well be discussed with the committee of workers.
■ 4: ■Education in' general business questions. This point is still
more doubtful than the preceding. Employers continually complain
that the- workers do not understand the responsibilities and the risks
which tJiey, as employers, have to carry, and it would seem desirable,
therefore, to take some steps to enable them to do so. In some
directions this would be quite feasible; for example,
WORKSHOP COMMITTEES 299
1. The reasons should be. explained and discussed for the establish-
ment of new works departments, or the reorganization of
existing ones, the relation of the new arrangement to the
general manufacturing policy being demonstrated.
2. Some kind of simplified works statistics might be laid before a
committee of workers; for example,
Output.
Cost of new equipment installed.
Cost of tools used in given period.
Cost of raw material consumed.
Number employed.
Amount of bad work produced.
3. Reports of activities of other parts of the business might be laid
before them.
(i) From the commercial side, showing the difficulties to be
met, the general attitude of customers to the firm, etc.
(2) By the chief technical departments, design office, labora-
tory, etc., as to the general technical developments or diffi-
culties that were being dealt with. Much of such work need
not be kept secret and would tend to show the workers that
other factors enter into the production of economic wealth
besides manual labor.
4. Simple business reports, showing general trade prospects, might
be presented. These are perhaps most difficult to give, in any
intelligible form, without publishing matter which every
management would object to showing. Still, the attempt
would be well worth making and would show the workers
how narrow is the margin between financial success and
failure on which most manufacturing businesses work. Such
statistics might, perhaps, be expressed not in actual amounts
but as proportions of the wages bill for the same period.
SECTION II. TYPES OF ORGANIZATION
Having dealt in the previous section with the kinds of questions
which, judged simply by their nature, would admit of joint discussion
or handling, it is now necessary to consider what changes are needed
in the structure of business management to carry out such proposals.
The development of the necessary machinery presents very consider-
able difficulties on account of the slowness of action and lack of
executive precision which almost necessarily accompany democratic
organization and which it is the express object of most business
organizations to avoid.
300 TRADE UNIONISM AND LABOR PROBLEMS
The question of machinery for joint discussion and action is con-
sidered in this section in three aspects :
1. The requirements which such machinery must satisfy.
2. The influence of various industrial conditions on the type of ma-
chinery likely to be adopted in particular trades or works.
3. Some detailed suggestions of shop committees of varying scope.
Requirements to be Satisfied
1. Keeping in touch with the trade-unions. It is obvious that no
works committee can be a substitute for the trade-union, and no
attempt must be made by the employer to use it in this way. To
allay any trade-union suspicion that this is the intention, and to
insure that the shop committee links up with the trade-union organi-
zation, it would be advisable to see that the trade-union is repre-
sented in some fairly direct manner. This is specially important for
any committee dealing with wages, piecework, and such other work-
ing conditions as are the usual subject of trade-union action.
In the other direction, it will be necessary for the trade-unionists
to develop some means of working shop committees into their scheme
of organization ; otherwise there will be the danger of a works com-
mittee, able to act more quickly through being on the spot, usurping
the place of the local district committee of the trade-unions.
2. Representation of all grades. The desirability of having all
grades of workers represented on works committees is obvious, but it
is not always easy to carry out, owing to the complexity of the distri-
bution of labor in most works. Thus, it is quite common for a single
department, say in an engineering works, to contain several grades of
workers, from skilled tradesmen to laborers, and possibly women.
These grades will belong to different unions, and there may even be
different, and perhaps competing, unions represented in the same
grade. Many of the workers also will not be in any union at all.
3. Touch with management. As a large part of the aim of the
whole development is to give the workers some sense of management
problems and point of view, it is most desirable that meetings be-
tween works committees and management should be frequent and
regular and not looked on merely as means of investigating grievances
or deadlocks when they arise. The works committee must not be
an accidental excrescence on the management structure, but must
WORKSHOP COMMITTEES 301
be worked into it so as to become an integral part, with real and
necessary functions.
4. Rapidity of action. Delays in negotiations between employers
and labor are a constant source of irritation to the latter. Every
effort should be- made to reduce them. Where this is impossible, due
to the complication of the questions involved, the works committee
should be given enough information to convince it of this, and that
the delay is not a deliberate attempt to shirk the issue.
On the other hand, the desire to attain rapidity of action should
not lead to haphazard and "scratch" discussions or negotiations.
These will only result in confusion, owing to the likelihood that some
of those who ought to take part or be consulted over each question
will be left out or have insufficient opportunity for weighing up the
matter. The procedure for working with or through works com-
mittees must, therefore, be definite and constitutional, so that every-
one knows how to get a grievance or suggestion put forward for
consideration and everyone concerned will be sure of receiving due
notice of the matter.
The procedure must not be so rigid, however, as to preclude
emergency negotiations to deal with sudden crises.
Influence of Various Industrial Conditions on the Type of
Organization of Shop Committees
There is no one type of shop committee that will suit all conditions.
Some industries can develop more easily in one direction and some
in another, and in this subsection are pointed out some of the
conditions which are likely to influence development.
I. Type of labor. The constitution of works committees, or the
scheme of committees, which will suitably represent the workers of
any particular factory will depend very largely on the extent to
which different trades and different grades of workers are involved.
In the simplest kind of works, where only one trade or craft is
carried out, the workers, even though of different degrees of skill,
would probably all be eligible for the same trade-union. In such a
case a purely trade-union organization, but based of course on works
departments, would meet most of the requirements, and would prob-
ably, in fact, be already in existence.
302 TRADE UNIONISM AND LABOR PROBLEMS
In many works^ however, at least in the engineering industry, a
number of different " trades " are carried on ; for instance, turning,
automatic-machine operating, blacksmithing, patternmaking, foundry
work, etc. Many of these trades are represented by the same trade-
union, though the interests of the various sections aye often antago-
nistic ; for example, in the case of turners and automatic-machine
operators. Some of the other trades mentioned belong to different
unions altogether. In addition to these "tradesmen" will be found
semiskilled and unskilled laborers. For the most part these will
belong to no union, though a few may belong to laboring unions
which, however, have no special connection with the engineering
unions. In addition to all these there may be women, whose position
in relation to men's unions is still uncertain, and some of whose in-
terests will certainly be opposed to those of some of the men.
The best way of representing all these different groups will d^end
on their relative proportion and distribution in any given works.
Where women are employed in any considerable numbers it will prob-
ably be advisable for them to be represented independently of the
men. For the rest it will probably be necessary to have at least two
kinds of works committees: one representing trade-unionists as
such, chosen for convenience by departments ; the other representing
simply works departments. The first would deal with wages and
the type of question usually forming the subject of discussion be-
tween employers and trade-unions; the other would deal with all
other workshop conditions. The first, being based on trade-unions,
would automatically take account of distinctions between different
trades and different grades, whereas the second would be dealing with
those questions in which such distinctions do not matter very much.
2. Stability and regularity of employment. Where work is of
an irregular or seasonal nature and workers are constantly being
taken on and turned off, only the very simplest kind of committee
of workers would be possible. In such industries probably nothing
but a trade-union organization within the works would be possible.
This would draw its strength from the existence of the trade-union
outside, which would, of course, be largely independent of trade fluc-
tuations and would be able to reconstitute the works committee as
often as necessary, thus keeping it in existence even should most of
the previous members have been discharged through slackness.
WORKSHOP COMMITTEES 303
3. Elaboration of management organization. The extent to which
management functions can be delegated or management questions
and policy be discussed with the workers depends very largely on
the degree of completeness with which the management itself is or-
ganized. Where this is haphazard and management consists of a
succession of emergencies, only autocratic control is possible, being
the only method which is quick-acting and mobile enough. There-
fore, the better organized and more constitutional (in the sense of
having known rules and procedures) the management is, the more
possible is it for policy to be discussed with the workers.
Some Schemes Suggested
The following suggestions for shop organizations of workers are
intended to form one scheme. Their individual value, however, does
not depend on the adoption of the scheme as a whole, each being
good as far as it goes.
I. Shop-stewards committee. As pointed out in the last sub-
section, in a factory where the trade-union is strong there will
probably be a shop-stewards or trade-union committee already in
existence. This is, of course, a committee of workers only, elected
generally by the trade-union members in the works to look after
their interests and to conduct negotiations for them with the man-
agement. Sometimes the stewards carry out other purely trade-
union work, such as collecting subscriptions, obtaining new members,
explaining union rules, etc. Such a committee is the most obvious
and simplest type of works committee, and where the composition
of the shop is simple (that is, mainly one trade, with no very great
differences in grade) a shop-stewards committee could deal with
many of the questions laid down as suitable for joint handling.
It is doubtful, however, whether a shop-stewards committee can,
or should, cover the full range of workers' activities except in the
very simplest type of works. The mere fact that as a purely trade-
union organization it will deal primarily with wages and piecework
questions will tend to introduce an atmosphere of bargaining, which
would make the discussion of more general questions very difficult.
Further, such a committee would be likely to consider very little
else than the interests of the trade-union or of themselves as
304 TRADE UNIONISM AND LABOR PROBLEMS
trade-unionists. While this is no doubt quite legitimate as regards
such questions as wages, the more general questions of workshop
amenities should be considered from the point of view of the works
as a community in which the workers have common interests with
the management in finding and maintaining the best conditions pos-
sible. Moreover, in many shops, where workers of widely differing
grades and trades are employed, a shop-stewards committee is not
likely to represent truly the whole of the workers, but only the
better-organized sections.
The shop-stewards committee, in the engineering trade at least, is
fairly certain to constitute itself without any help from the manage-
ment. The management should hasten to recognize it and give it
every facility for carrying on its business, and should endeavor
to give it a recognized status and to impress it with a sense of
responsibility.
It would probably be desirable that shop stewards should be
elected by secret ballot rather than by show of hands in open meeting,
in order that the most responsible men may be chosen and not merely
the loudest talkers or the most popular. It seems better, also, that
stewards should be elected for a certaini definite term, instead of
holding office, as is sometimes the case now, until they resign, leave
the firm, or are actually deposed. The shop-stewards committee
being primarily a workers' and trade-union affair, both these points
are outside the legitimate field of action of the management. The
latter's willingness to recognize and work through the committee
should, however, confer some right to make suggestions even in such
matters as these.
The facilities granted by the management might very well include
a room on the works premises in which to hold meetings and a place
to keep papers etc. If works conditions make it difficult for the
stewards to meet out of work hours, it would be well to allow them
to hold committee meetings in working hours at recognized times.
The management should also arrange periodic joint meetings with
the committee, to enable both sides to bring forward matters of
discussion.
The composition of the joint meeting between the committee of
shop stewards and the management is worth considering shortly.
In the conception here set forth the shop-stewards committee is a
WORKSHOP COMMITTEES 305
complete entity by itself; it is not merely the workers' section of
some larger composite committee of management and workers. The
joint meetings are rather in the nature of a standing arrangement
on the part of the management for receiving deputations from the
workers. For this purpose the personnel of the management section
need not be fixed, but could well be varied according to the subjects
to be discussed. It should always include, however, the highest exec-
utive authority concerned with the works. For the rest, there might
be the various departmental managers and, sometimes, some of the
foremen. As the joint meeting is not an instrument of management
taking decisions by vote, the number of the management contingent
does not really matter beyond assuring that all useful points of view
are represented.
Too much importance can hardly be laid on the desirability of
regular joint meetings, as against ad hoc meetings called to discuss
special grievances. According to the first plan each side becomes
used to meeting the other in the ordinary way of business, say once
a month, when no special issue is at stake and no special tension is
in the air. Each can hardly fail to absorb something of the other's
point of view. At a special meeting, on the other hand, each side
is apt to regard as its business not the discussion of a question on
its merits but simply the making out of a case. And the fact that
a meeting is called specially means that expectations of results are
raised among the other workers which make it difficult to allow the
necessary time or number of meetings for the proper discussion of
a complicated question.
Where women are employed in considerable numbers along with
men the question of their representation by stewards becomes im-
portant. It is as yet too early to say how this situation can best be
met. If they are eligible for membership in the same trades-unions
as the men, the shop-stewards committee might consist of representa-
tives of both. But considering the situation which will arise after
the war, when the interests of the men and of the women will often
be opposed, this solution does not seem very promising at present.
Another plan would be for a separate women's shop-stewards
committee to be formed, which would also meet the management
periodically and be, in fact, a duplicate of the men's organization.
It would probably also hold periodic joint meetings with the men's
3o6 TRADE UNIONISM AND LABOR PROBLEMS
committee, to unify their policies as far as possible. This plan is
somewhat cumbersome, but seems to be the only one feasible at
present, on account of the divergence of interest and the very different
stage of development in organization of men and women.
2. Social union. Some organization for looking after recreation
is in existence in many works, and if not, there is much to be said
for the institution of such a body as the social union here described.
Although the purpose which calls together the members of a works
community is, of course, not the fostering of social life and amenities,
there is no doubt that members of such communities do attain a
fuller life and more satisfaction from their association together when
common recreation is added to common work. It may, of course, be
urged against such a development of community life in industry that
it is better for people to get away from their work and to meet quite
another set in their leisure times. This is no doubt true enough, but
the number of people who take advantage of it is probably very
much less than would be affected by social activities connected with
the works. The development of such activities will, in consequence,
almost certainly have more effect in spreading opportunities for fuller
life than it will have in restricting them. Moreover, if the works is
a large one, the differences in outlook between the various sections
are perhaps quite as great as can be met with outside. For this
reason the cardinal principle for such organizations is to mix up
the different sections and grades, especially the works and the office
departments.
The sphere of the social union includes all activities other than
those affecting the work for which the firm is organized. This sphere
being outside the work of the firm, the organization should be en-
tirely voluntary and in the hands of the workers, though the manage-
ment may well provide facilities such as rooms and playing fields.
Two main schemes of organization are usual. In the first a general
council is elected by the members, or, if possible, by all the employees,
irrespective of department or grade. This council is responsible for
the general policy of the social union, holds the funds, and under-
takes the starting and supervising of smaller organizations for specific
purposes. Thus, for each activity a club or society would be formed
under the auspices of the council. The clubs would manage their own
affairs and make their own detail arrangements.
WORKSHOP COMMITTEES 307
It is most desirable that the social union should be self-supporting
as far'as running expenses go and should not be subsidized by the
management, as is sometimes done. A small subscription should
be paid weekly by every member, such subscription admitting them
to any or all clubs. The funds should be held by the council and
spent according to the needs of the various clubs, not according to
the subscriptions traceable to the membership of each. This is very
much better than making the finances of each club self-supporting,
since it emphasizes the "community" feeling, is very simple, and
enables some forms of recreation to be carried on which could not
possibly bte made to pay for themselves.
The second general type of social-union organization involves
making the clubs themselves the basis. Each levies its own sub-
scriptions and pays its own expenses, and the secretaries of the clubs
form a council for general management. This is a less desirable
arrangement, because each member of the council is apt to regard
himself as there only to look after the interests of his club, rather
than the whole. The starting of new activities is also less easy
than under the first scheme.
3. Welfare committee. The two organizations suggested so far,
namely, shop-stewards committee and social union, do not cover the
whole range of functions outlined in Section I. In considering how
much of that field still remains to be covered it is simplest first to
mark off, mentally, the sphere of the social union ; namely, social
activities outside working hours. This leaves clear the real problem ;
namely, all the questions affecting the work and the conditions of
work of the firm. These are then conceived as falling into two groups.
First, there are those questions in which the interests of the workers
may,be opposed to those of the employer. These are concerned with
such matters as wage and piece rates, penalties for spoiled work, etc.
With regard to these discussion is bound to be of the nature of bar-
gaining, and these are the field for the shop-stewards committee,
negotiating by means of the periodical joint meetings with the
management.
There remains, however, a second class of questions, in which there
is no clash of interest between employer and employed. These are
concerned mainly with regulating the "community life" of the works;
and include all questions of general shop conditions and amenities
3o8 TRADE UNIONISM AND LABOR PROBLEMS
and the ^more purely educational matters. For dealing with this
group a composite committee of management and workers, here called
the Welfare Committee, is suggested.
This would consist of two parts :
1. Representatives elected by workers.
2. Nominees of the management.
The elected side might well represent the offices, both technical
and clerical, as well as the works, and members would be elected by
departments, no account being taken of the various grades. Where
women are employed it would probably be desirable for them to elect
separate representatives. If they are in departments by themselves,
this would naturally happen. If the departments are mixed, the men
and women of such departments would each send representatives.
The trade-union or unions most concerned with the work of the
firm should be represented in some fairly direct way. This might be
done in either of two ways :
1. If a shop-stewards committee exists, it might be asked to send one
or more representatives.
2. Or each of the main trade-unions represented in the works might
elect one or more representatives to represent their members
as trade-unionists.
The management section should contain, in general, the highest
members of the management who concern themselves with the run-
ning of the works ; it would be no use to have here men in subor-
dinate positions, as much of the discussion would deal with matters
beyond their jurisdiction. Moreover, the opportunity for the higher
management to get into touch with the workers would be too im-
portant to miss. It is doubtful whether there is any need for the
workers' section of the welfare committee to meet separately, though
there is no objection to this if thought desirable. In any case a
good many questions can be handed over by the joint meeting to
subcommittees for working out, and such subcommittees can, where
desirable, consist entirely of workers.
It may be urged that the welfare committee is an unnecessary
complication and either that its work could be carried out by the
shop-stewards committee or that the work of both could be handled
by a single composite shop committee of management and workers.
In practice, however, a committee of the workers sitting separately
WORKSHOP COMMITTEES 309
to consider those interests that are, or appear to be, opposed, with
regular deputations to the management, and a composite committee
of workers and management sitting together to discuss identical in-
terests would seem the best solution of a difficult problem.
Everything considered, therefore, there seems, in many works at
least, to be a good case for the institution of both organizations,
that of the shop stewards and that of the welfare committee. The
conditions making the latter desirable and possible would seem to be
1. A management sufficiently methodical and constitutional to make
previous discussion of developments feasible.
2. The conditions of employment fairly stable.
3. The trades and grades included in the shop so varied and inter-
mixed as to make representation by a committee of trade-
union shop stewards incomplete.
SECTION III. SUMMARY AND CONCLUSIONS OF
SECTIONS I AND II
Gathering together the views and suggestions made in the fore-
going pages, it is felt that three separate organizations within the
works are necessary to represent the workers in the highly developed
and elaborate organisms which modern factories tend to become.
It is not sufficient criticism of such a proposal to say that it is too
complicated. Modern industry is complicated, and the attempt to
introduce democratic ideas into its governance will necessarily make'
it more so. As already pointed out, the scheme need not be accepted
in its entirety. For any trade or firm fortunate enough to operate
under simpler conditions than those here assumed only such of the
suggestions need be accepted as suit its case.
The scope of the three committees is shown by the following
summary:
I. Shop-stewards committee
Sphere. Controversial questions where interests of employer
and worker are apparently opposed.
Constitution. Consists of trade-unionist workers elected by
works departments.
Sits by itself, but has regular meetings with the management.
Examples of questions dealt with:
Wage and piece rates.
The carrying out of trade-union agreements.
310 TRADE UNIONISM AND LABOR PROBLEMS
Negotiations re application of legislation to the workers repre-
sented ; for example, dilution, exemption from recruiting.
The carrying out of national agreements re restoration of
trade-union conditions, demobilization of war industries, etc.
Introduction of new processes.
Ventilation of grievances re any of above.
Etc., etc.
2. Welfare committee
Sphere. "Community" questions, where there is no clash
between interests of employer and worker.
Constitution. Composite committee of management and work-
ers, with some direct representation of trade-unions.
Sits as one body, with some questions relegated to subcommit-
tees, consisting either wholly of workers or of workers and
management according to the nature of the case.
Examples oj questions dealt with :
Shop rules.
Such working conditions as starting and stopping times, meal
hours, night-shift arrangements, etc.
Accident and sickness arrangements.
Shop comfort and hygiene.
Benevolent work, such as collections for charities, hard cases
of illness, or accident among the workers.
Education schemes :
Trade technic.
New works developments.
Statistics of works activity.
Business outlook.
Promotions^ — explanation and, if possible, consultation.
Ventilation of grievances re any of above.
3. Social union
Sphere. Social amenities, mainly outside working hours.
Constitution. Includes any or all grades of management and
workers.
Governing body elected by members irrespective of trade,
grade, or sex.
Example oj activities:
Institution of clubs for sports — cricket, football, swimming,
etc.
Recreative societies — orchestral, choral, debating, etc.
Arranging social events — picnics, dances, etc.
Provision of games, library, etc., for use in meal hours.
Administration of clubrooms.
C. G. Renold
Hans Renold Limited, Manchester, England
XXIII
LABOR ADMINISTRATION IN THE SHIPBUILDING
INDUSTRY DURING WAR TIME"^
THE FUNCTIONING OF THE ORGANIZATIONS UPON
PROBLEMS
LIKE practically every governmental agency, the system of ship-
yard labor administration was just getting into its stride when
the armistice was signed. Early mistakes were being remedied, and
a thorough and comprehensive machinery had just been set up. But
relatively short as was the period in which the work was performed,
the functioning of the organizations upon the various problems can
be studied and stated with a fair degree of accuracy.
I. Wages
The wage question was perhaps the most perplexing problem with
which the Emergency Fleet Corporation dealt. Increases, it should
be realized, were granted not only by the Shipbuilding Labor Ad-
justment Board but by the Corporation itself. In May, 1918, the
Corporation granted certain increases to salaried employees who
earned less than $2000 a year, since the Board had made no pro-
vision for these grades. Increases for leading men, quarter men,^
and foremen, who had been omitted by the Board, were also granted
in order that these classes might receive a wage in reasonable balance
with the wages of the men employed under them. The Fleet Cor-
poration, however, did not grant further increases in the fall of 19 18,
because of the signing of the armistice and the probability of a
plentiful labor supply.
iProm J-ournal of Political Economy , Vol. XXVII (igig), pp. 362-396.
2 By leading man is meant the foreman of a group of ten to eighteen work-
men ; by quarter man, the foreman of a group of twenty-four to thirty
workmen.
3"
312 ■ TRADE UNIONISM AND LABOR PROBLEMS
It has always puzzled the man in the street how the Adjustment
Board and the Fleet Coiporation were enabled to order these in-
creases to be paid and by what power they compelled the shipbuilders,
who were not themselves parties to the memorandum creating the
Board, to comply with their decisions. The answer is very simple.
The Fleet Corporation was enabled to make these awards effective
only by promising to reimburse the shipbuilders for any added
labor cost occasioned either by the decisions of the Board or by the
instructions of the Corporation.
It must not be thought, however, that this policy of reimbursement
was adopted immediately and uniformly. It was, indeed, uncertainty
over this very question in the fall of 191 7 that delayed the organi-
zation of the Board. For months after the first decisions it was the
practice to grant reimbursement only when the companies made ur-
gent pleas and not to grant it to companies who entered no claim.
Until June i, 1918, there was no uniform method of granting this
reimbursement. Each case was settled by itself, and no common
accounting practice in computing or paying the reimbursement was
followed. The shipbuilders were compelled to struggle for what they
got, and many who were in ignorance of the situation did not ask
for any reimbursement at all. The situation became so unsatisfac-
tory that on May 31, 1918, the Fleet Corporation issued a lengthy
General Order outlining a uniform policy to be followed in computing
any paying for the increased labor cost.^ This was followed by a
series of General Orders which covered further points.
It was, however, one thing to establish wage rates and another to
enforce them, and it was their enforcement that occasioned the
greatest difficulty and unrest. The violations were of two main
types:
I. Neglect on the part of shipbuilding companies to pay workmen
back pay due them. This was a provocative cause of dissatisfaction.
The Adjustment Board made all of its major decisions retroactive to
varying dates. The computing of this back pay was difficult, and
the shipbuilding companies were very slow in complying with the
orders of the Board and the Fleet Corporation. In September, 1918,
some of the yards in the Columbia River district had not paid the
retroactive increases granted in the November, 19 17, decisions. The
iThis was the much-consulted General Order No. 36.
SHIPYARD LABOR ADMINISTRATION 313
conditions were also unsatisfactory in several other districts. This
failure promptly to pay retroactive increases had the inevitable result
of arousing the ire of the men and making them impatient with the
whole system of wage administration.
2. Violations of the established rate. This type of violation was
even more common, and was basically more important, than the
former. The two memoranda which created the Board were drawn
up in the period when it was thought that the chief purpose in fixing
the wage scale was to protect the standard of living of the workers
against the increase in prices. It was therefore originally intended
to make the wage scale fixed by the Board merely a minimum. Both
memoranda term the wage rates which the Board was to fix as "basic
standards." The accepted interpretation of this phrase is that the
rates established are to be minima below which no member of a craft
can be paid, but above which individual workers can receive a higher
wage through superior ability or by the process of individual bar-
gaining. A strike on the part of the union, however, to obtain a
higher basic wage for all members of the craft would constitute a
violation of the agreement and a breach of faith. The Board in every
one of its first set of decisions explicitly stated that the rates were
minima.
During the first few months some violations were complained of
where companies were refusing to pay as high wages as the Board
had ordered or where they were classifying the men in lower grades
with lower wages than those to which the workmen rightly belonged.
The Corporation promptly remedied such conditions.
In the late winter and early spring of 19 18 another significant de-
velopment occurred, which was caused partly by the drain upon the
nation's man power, following upon the expansion of the army.
A decided shortage in labor became apparent, which was especially
acute in some of the more skilled trades, such as coppersmiths, chip-
pers and calkers, riveters, machinists, blacksmiths, etc. There was,
moreover, a very considerable shortage of common labor, which be-
came more acute after the heavy draft quotas of the late spring and
early fall of 19 18.
Each contractor was desirous of completing his contract and was
therefore eager to get a sufficient number of men. He was conse-
quently willing to pay more than the fixed scale in order to get the
314 TRADE UNIONISM AND LABOR PROBLEMS
men. Thie situation became especially acute; in the Pacific. iNbrth-
west, where the wage scale in one of the largest shipbuilding cplahtB
and in many of the outside shops had always been higher than that
set by the Board, even when the lo per cent bonus of December,
19 1 7, was added. The result was a competitive bidding for labor.
Workmen moved about from plant to plants and the stability of
labor was seriously threatened. The production- program was hin-
dered, for men who were needed on the job were rushing about from
plant to plant on railroad trains. The Fleet Corporation tried to
check this by refusing, on June i, 1918, to reimburse shipbuilders
for any wages paid in excess of those fixed by the Board. :This was
strengthened by, a General Order, issued July i, 19 18, making the
established scale a maximum and prohibiting employers from ex-
ceeding it. It should be emphasized that it was the Fleet Corporation
and not the Adjustment Board that issued these orders which estab-
lished the Board's rates as maxima, although the Adjustment Board
unofficially ' approved.^
These orders ^ of the Corporation were followed in the majority of
cases, but in at least two' sections of the country they were dis-
regarded., As has been stated, the situation in the Seaittle. district
had always been unsatisfactory, and in order to hold their: labor,
many yards raised their wages ta a point far in excess of that
set by the Board, until the situation was one in which practically
75 per cent of the men were receiving more than the authorized
wage. The piecework' trades along the Atlantic Coast were also
paid at a higher rate than that authorized, owing to the permis-
sion of the Board to use the " allowance system" on difficult work.
This was originally intended to apply only to work which was so
difficult that piece rates would be; unfair, and it was not intended
to cover more than 10 per cent of the operations in the pre-war
iThis was sometimes forgotten even by members of the Board itself ; thus
Mr. Macy in blaming Seattle shipyard employers states that they "violated
all orders of the Shipbuilding Labor Adjustment Board and the Emergency
Fleet Corporation by paying wages far in excess of the scale authorized"
{National Civic Federation Review, February, 1919, p. 2). (Italics are mine.)
2 To prevent shipbuilders constructing for private account from disrupting the
labor market, all yards of this group were corripelled to obtain a permit .from
the Corporation, binding themselves not to exceed the authorized scale.,.The
legal sanctions behind this requirement were (i) power to irequisition ships," (2)<
withholding priorities on materials, etc. . . . - .'
SHIPYARD LABOR ADMINISTRATION 315
times. Tiie shortage of workers, however, was such that most of the
Atlantic Coast companies abused the use of the "allowance system"
and applied it to nearly all of the piecework, whether it was difficult
or not. As a result many of the riveting gangs were granted from
$25 to $60 a day irrespective of the number of rivets driven, and
great abuses resulted. This was, indeed, not finally checked until
February, 19 19.
' A further method of violation was the improper classification of
workers by shipbuilding companies. It was not an unknown practice
to list workers under classifications: with higher rates of pay than
were actually deserved. Some yards listed mechanics as leading men,
quarter men, or foremen, and thus paid them a higher wage without
ostensibly, violating the orders of the Corporation. In several yards
there were in some trades more foremen than men, while in one yard
there were actually thirteen foremen and two men in a particular
trade!
The violation of the wage scales was caused not only by the
scarcity- of labor but by the existence of cost-plus contracts. The
number of these contracts was not so large as has been commonly
supposed and, indeed, decreased as time went on, but many of the
wood-ship yards and a few of the steel yards were on this basis.
The inevitable result of these contracts was, of course, to make the
contractor less careful of his labor costs. Although there were only
a few such yards, their influence was widespread, since they set a
pace which other companies felt that they must meet in .order to
hold their labor force.
In addition, the accounting procedure set up by the Fleet Cor-
poration to cover reimbursement for increased labor cost was cumber-
some and involved, and the auditing division was not organized as
effectively as it might have been._ Prior to the signing of the armis-
tice most of the companies which had paid rates in excess of the
authorized scale were reimbursed for all their labor costs and even
for their violations. True, the government will not necessarily lose
on- these freimbursements, for -final settlements were not made, and
steps iave since been taken to protect the Treasury against improper
wage-cost claims. Nevertheless the temporary adjustments, which
sometimes covered improper clainis, played their part in unsettUng
labor conditions.
3i6 TRADE UNIONISM AND LABOR PROBLEMS
The "excessive" wages which many complained that the shipyard
workers were receiving; when they did actually occur, did not result
from the decisions of the Adjustment Board, which merely adjusted
wages in keeping with the increase in the cost of living,^ but were
caused either by the competitive bidding of the employers in giv-
ing higher wages than those awarded in order to attract workmen to
their particular contract or by the practice of excessive overtime.
In spite of what has been said, it is, however, undoubtedly true
that in the majority of cases the Adjustment Board's rates were both
maxima and minima, and that consequently standardization of wages
was roughly effected.
After the signing of the armistice, as will be stated later, the Fleet
Corporation suspended making the Board's rates maxima, although
of course it refused to reimburse ship contractors for wages in excess
of the Board's scale.
II. Hours
The basic eight-hour day was uniformly established in the ship-
yards as the standard working-day. Due to a previous custom of a
Saturday half-holiday in the Delaware River district the basic forty-
four-hour week was established there. Overtime was paid for at the
rate of time and a half for all districts save the Pacific Coast, where
it was paid for as double time. Sunday and holiday work was uni-
versally paid for at double rates. The Labor Adjustment Board fixed
no limits as to the amount of overtime that could be worked in the
Pacific Coast districts, but in their other decisions they prescribed
a maximum working-day of twelve hours and a maximum sixty-
hour working-week, except at the order of the Fleet Corporation or
Navy Department.
The overtime bonuses increased rather than decreased the length
of the average working-day. The men were anxious to receive the
extra pay for overtime, and the managements were willing, because
they could charge the expense to the Fleet Corporation. Owing to
an egregious blunder by one of the construction divisions of the
Corporation, certain shipyard owners were even paid to July i, 1918,
iThe Board increased wages on the Pacific Coast approximately 60 per
cent over the 1916 rates. This was not excessive in view of the increase in
the cost of living.
SHIPYARD LABOR ADMINISTRATION 317
an additional bonus of from 25 per cent to 160 per cent on every
dollar that the workmen received for overtime.^
A better system to encourage overtime could not have been devised.
General Manager Piez was constantly exerting pressure to reduce
the amount of overtime, but up to June i there were no definite orders
issued as to the amount which would be allowed, and the district
managers of the Corporation were given a great deal of discretion.
On June i the amount of overtime was fixed at a maximum of
two hours per man per day, " except under extraordinary and special
circumstances."
The results of overtime work were, of course, lamentable. Not
only was it on the whole inefficient but there were cases where men
loafed during the first eight hours in order that they might have an
excuse for working overtime. It furthermore directly increased ab-
senteeism. Some men would work Sunday at double time and then
lay off a day during the week, thus getting their day's rest and
receiving seven days' pay for six days' work. It also made many of
the rank and file reluctant to have more men added to the working
force, since it decreased their opportunities for overtime.
The labor leaders themselves recognized the viciousness of over-
time, as did the employers after their premium upon it was taken
away, and representatives of both parties from the Pacific Coast
recommended that it be entirely prohibited except during cases of
urgent necessity. It was not until after the signing of the armistice,
however, that the Fleet Corporation issued an order specifically put-
ting the work on an eight-hour day and abolishing overtime. Several
small groups of workmen then struck because they were prevented
from working more than eight hours a day.
The whole experience with the basic eight-hour day and the over-
time bonus during war time was such as to demonstrate conclusively
that the basic eight-hour day on contract work for the government
really conduces to a long working-day. The men are more eager to
receive the overtime bonus than they are to limit their work to eight
hours, and "loafing on the job" is the result. Since the government
iThe reason assigned for granting this bonus was that the effidency of the
yard was decreased by working overtime and that the management should be
rewarded for this loss. This is an eloquent bit of testimony to the necessity
of 'centralizing the control of labor matters in one department under com-
petent guidance.
3i8 TRADE UNIONISM AND LABOR PROBLEMS
foots the bills the managements do not have the objection to over-
time work that they would have if they were compelled to pay.
There can be little doubt that the Fleet Corporation lost millions of
dollars by reason of this practice, and it seems clear that a better
arrangement would have been to establish a flat eight-hour day and
to have permitted no overtime save in cases of an emergency and at
the express permission of the Corporation's representatives.
III. Unions, Shop Committees, and Collective Bargaining
The creation of the Shipbuilding Labor Adjustment Board was
in itself a recognition of the international unions and collective bar-
gaining. The Fleet Corporation dealt with the union officials as
representatives of labor, and the policy pursued by the Corpo-
ration and by the Board itself was such as to encourage collective
bargaining.
The policy of the Board and the Fleet Corporation toward the
"closed shop" was really that of refusing to disturb the status quo.
The Board refused to permit shops to be closed against the will of
the employer, if they had not been closed prior to the war. Where the
closed shop had existed, as in the San Francisco and Puget Sound
districts, it was continued.
The Board declared that discrimination should not be practiced -
against any workman either on the ground that he belonged, or on
the ground that he did not belong, to a union. This was enforced
by the Fleet Corporation, and many men who had been discharged
or forced from employment were ordered to be reinstated. It was,
of course, impossible to enforce this perfectly because of the difficulty
in determining the real causes for dismissal.
The principles promulgated by the War Labor Conference Board ^
were adopted by the Fleet Corporation as its labor policy, and it
therefore permitted the organization of the workers into unions and
protected from discharge the men who joined. It is difficult to measure
the growth of unionism among the shipyard workers, but there can
be little doubt that the unions made great gains in membership, and
that they emerged from the war far stronger than when they went in.
iThe War Labor Conference Board afterward became by presidential ap-
pointment the War Labor Board.
SHIPYARr) LABOR ADMINISTRATION 319
One of the striking acts of the Board was the authorization of shop
committees to handle grievances. This was first provided for in the
Portland district, where the employers refused to recognize the unions
as such. It was later authorized for all other yards, save in the
Seattle and San Francisco districts.^ The establishment of these shop
committees was really intended to provide nonunion collective bar-
gaining and adjustment of grievances in those yards which would not
recognize unions. Although many of these committees were organ-
ized, they cannot be said to have been a success, in actual operation,
except in one district.
In one district, for example, not many of the yards had definitely
constituted committees, with regular periods of meeting, nor were
all crafts within the yards organizeid. The committees in this district
did not consider more than 20 per cent of the complaints which arose,
and the other 80 per cent were taken up with the examiner himself
either by the business agents of the unions or by the direct appeal
of the parties interested.
The chief reasons for the failure of these committees to function
were as follows:
1. The lack of active organization upon the part of the Shipbuilding
Labor Adjustment Board. The Board authorized the organization of
the committees, but for a long time did little else. Only one of the
examiners devoted much attention to organizing these committees.
Moreover, when the committees were organized they were not always
given proper facilities for conducting business.
2. The indifference of the workers. The men were busy and were
earning good wages and did not take much interest in organizing
the committees.
3. The more or less open hostility of the unions. The unions were
afraid that the committees would usurp their functions and that they
could be used to break down the unions. This was not wholly un-
justified, since in some cases the employers attempted to control the
election of the committeemen. Perhaps the most important point
about the organization of shop committees is as to whether they will
1 Although authorized for the Delaware River district in the October 34, 1918,
decision, no shop committees were set up there because of the complications
with the unions that might result.
32 o TRADE UNIONISM AND LABOR PROBLEMS
be a substitute for, or a supplement to, unionism.^ The unions have
been loath to approve of them until they were convinced that they were
intended to be the latter and not the former.
IV. Labor Supply
The Fleet Corporation officials at first regarded the securing
of materials as the most pressing production problem, but after
this had been centralized in a Supply Division the securing of
sufficient labor became the most urgent problem. It was the ques-
tion whether enough men could be brought into the shipyards
and trained that most agitated shipbuilders during 1918. There
were really two problems of labor supply: (i) that of securing
a sufficient number of men for the industry as a whole ; (2) that of
distributing this labor so that all yards could have an adequate
amount. Table I shows the number of men working in the shipyards.
One must first ascertain how many men were needed to carry out the
production program before estimating whether the industry as a
whole had a sufficient labor force. This can now be done with some
accuracy, but it was very difficult formerly, for the Shipping Board
never furnished the Fleet Corporation with a program to be attained.
The chairman of the Board at Congressional hearings and in public
speeches set varying figures. The 1918 program of deliveries for
steel ships was set by various authorities at 6,000,000 and 4,000,000
tons. This was later scaled down to 3,100,000 tons by the production
engineers of the Fleet Corporation. As for wood ships, there was
never a real production program. Contracts were let more to fill
the ways than with a view to a comprehensive and well-thought-out
policy.
Since only 2,600,000 tons of steel ships were delivered in 1918, the
steel-ship shortage was consequently 500,000 tons.^ Since the aver-
age production per man-year was approximately 25 dead-weight tons
(which is a fairly creditable production record) the average shortage
iSee the statement by Mr. Macy, the chairman of the Board, "Shop Com-
mittees must not be regarded as a substitute for the unions" {National Civic
Federation Review, February 25, 1919, p. 2).
2That is, if 3,100,000 tons is taken as the goal to be attained. It is a great
deal below the early estimates of 6,000,000 tons.
SHIPYARD LABOR ADMINISTRATION
321
of labor in the steel yards during 19 18 seems to have been around
20,000. The adequacy of the wood-ship labor force is difficult to
judge, since there was no program with which to compare it. It is
unquestionably true, however, that there were as many workmen
employed as the value of wooden ships as ocean carriers justified.
On the whole, therefore, while there was a shortage of labor in
the steel yards, this shortage was not as acute as was maintained
at the time.
Table I. Growth of the Labor Force on E.F.C. Work in Shipyards
BY Months
Month
Average Number of
Employees in Wood-
Ship Yards on
E.F.C. Work
Average Number of
Employees in Steel-
Ship Yards on
E.F.C. Work
Total Employees in
Shipyards on
E.F.C. Work
1917
October ....
12,000 (est.)
76,000 (est.)
88,000 (est.)
November ....
17,000 (est.)
103,000 (est.)
120,000 (est.)
December ....
21,000 (est.)
125,000 (est.)
146,000 (est.)
1918
January
31,000
160,000
191,000
February ....
38,000
166,000
204,000
March
47,000
181,000
228,000
April
58,000
200,000
258,000
May
70,000
211,000
281,000
June
77,000
237,000
314,000
July
8 1 ,000
251,000
332,000
August
85,000
267,000
352,000
September. . . .
9 1, 000
280,000
371,000
October
91,000
284,000
375,000
November ....
86,000
299,000
385,000
These statistics do not include those employed in plants devoted exclusively
to fitting out hulls after launching. They do include, however, some clerical
employees (not more than a few thousand in number) who should be charged
to construction work for the navy.
The total number of employees listed in the table should not be confused with
the number of men actually engaged in shipbuilding. In January, 1918, only 63.7
per cent of the employees were shipbuilders, while 26.4 per cent were engaged
on plant construction, and 9.9 per cent were office employees. Indeed, until May
over 20 per cent of the men were working on plant construction. By October the
percentage in shipbuilding had increased to 83.8 per cent of the total force, and
the percentage on plant construction had decreased to 7.7 per cent.
322 TRADE UNIONISM AND LABOR PROBLEMS
Despite the difficulties of drawing men to a new and exposed in-
dustry, where transportation and housing facilities were often over-
crowded and inadequate, the recruiting of the men for the industry
as a whole was accomplished without elaborate administrative organi-
zation by the Fleet Corporation itself. The one organization which
was started, namely the United States Shipyard Volunteers, was con-
ceived and managed by the Shipping Board and the United States
Department of Labor rather than by the Fleet Corporation officials.
The 280,000 men who were enrolled in this organization were listed
without proper investigation of their qualifications or as to whether
they were engaged in other essential industries. Once enrolled, they
were not called upon, for preference in employment was given to
those who were unemployed over those enrolled in the Shipyard
Volunteers. The men had expected that they would soon be called
to service in the yards, and many gave up their jobs. The manage-
ment of the Shipyard Volunteers, however, did not follow up the
campaign of enrollment and did not work out with the shipyards any
concerted plan whereby the labor requirements of the yards might
be ascertained and men furnished to them.
After August i, of course, the shipyards were compelled to hire
all of their unskilled labor through the United States Employment
Service. Skilled labor could, however, be hired through private
agencies, and the labor scouts of the shipyards themselves were in
most cases merely supervised by the Employment Service and allowed
to act for their individual companies in the securing of both skilled
and unskilled labor.
The movement of labor to the yards was therefore voluntary and
in the main unorganized. The facts which enabled the shipbuilding
industry to obtain in this way the 300,000 men were principally
the following :
I. Higher wages than those paid in the majority of other industries.
As has been stated, the Adjustment Board and the Fleet Corporation
itself sought to make shipyard wages higher than the average wage
level in order to draw men to the yards. A substantial differential
was, on the whole, created. In certain sections of the country, how-
ever, the wage scale in outside industries for some classes of labor
caught up with and even surpassed that of the shipyards. On the
Pacific Coast much difficulty was experienced in retaining common
SHIPYARD LABOR ADMINISTRATION 323
labor in the shipyards, since lumber camps and other occupations
were paying more for common labor than the wage scale fixed by the
Board. Late in the summer of 1918 the same situation with respect
to common labor prevailed in the Middle Atlantic States.
This attempt of the Board to fix higher wages than those in other
industries was probably justified because of the urgency of the need
for ships and the necessity of getting men to build them. The men
thus attracted were, however, drawn not only from nonessential but
from essential industries as well, and the whole situation illustrated
the necessity for a general standardization of wages, which un-
doubtedly would have been effected had the war continued for a
few months longer.
2. Patriotic desire of men to assist the governrkent. The need for
ships was widely advertised, and many thousands of men went to
the shipyards in order to help " do their bit."
3. Protection against draft. Under the selective-service law the
general staff created an "Emergency Fleet" listing, whereby, in
addition to the ordinary industrial exemption granted to all essential
industries, additional men could be protected from the draft and the
labor force constantly stabilized. Some 90,000 workers in the 800 ship-
yards and industrial plants having contracts with the Fleet Corpora-
tion were thus exempted from the draft under this form. Thus both
patriotic reasons and the desire to escape military service operated
to bring men to the yards and to keep them when they were once there,
4. Payment by the Fleet Corporation of the transportation ex-
penses of workers to the job. In order to facilitate the movement of
men from inland points to the shipyards, the Fleet Corporation
entered into an agreement with the United States Employment Serv-
ice early in the winter of 1918 to pay the transportation of labor
to the yards. This free transportation was not administered very
efficiently by the Employment Service, and moreover it operated
directly to increase the turnover of labor, because men could leave
one job and go to another at the expense of the Fleet Corporation.
One man traveled back and forth across the continent three times
at the expense of the Corporation. Just before the conclusion of the
armistice a system of control had been set up which promised to
handle the matter. After the armistice was signed this payment, of
course, was discontinued.
324 TRADE UNIONISM AND LABOR PROBLEMS
While it is probably true that, taken as a whole, the yards of the
country had nearly a sufficient labor supply, it is just as true that
this supply was poorly distributed. Many yards had so many men
that they could not be directed efficiently, and men were compelled
to remain idle because of lack of work which they could do. The
early days of the Hog Island and Submarine-Boat projects were but
lurid examples ; the same situation existed, though in a lesser degree,
in many other yards.
There were, on the other hand, other yards which were greatly
undermanned, and the causes for the dearth of labor in these yards
were primarily three:.
1. The individualistic attitude of the shipyard managements
whereby each contractor was concerned only with his own contract.
It was the common practice of shipyards to attempt to recruit labor
not only from industries other than shipbuilding but from other
shipbuilders as well. Sometimes this was done directly, and em-
ployees of another company were "scamped" by labor scouts, who
promised the men higher wages, more overtime, better housing, and
a score of similar inducements. Sometimes it was done indirectly
by advertisements stating supposedly superior advantages.
The labor forces of many shipyards were crippled by this " scamp-
ing" of labor, and shipbuilders often seemed more interested in
stealing labor from other companies than they were in retaining the
supply that they had.'^ The employers who were most conscientious
and refused to " scamp " were those who were penalized. The result
of this individualistic attitude was an enormous loss in productivity,
due to the loss of time in the shifting of labor and the impossibility
of maintaining a stable force.
2. Competition for labor by other government departments.
A number of yards lost their men because other near-by government
industries were paying higher wages than the yards could pay.
3. Unattractiveness of certain shipyards and inefficient manage-
ment. Wherever poor housing, inadequate transportation, and in-
sanitary and dangerous conditions existed men were loath to stay.
1 One enterprising labor scout is reported to have promised a group of sliip-
builders on tlie street higher pay than they were then receiving, only to discover,
after he had taken them to work, that they were already employed at his own
yard !
SHIPYARD LABOR ADMINISTRATION 325
This was heightened in many cases by the inefficient management
of the plants, which made men discouraged and disgruntled. Thus
inefficient management was a cause both of some yards' having too
much labor and of other yards' having too little.
It has been said above that the Fleet Corporation did not perfect
an elaborate organization to deal with the problem of labor supply.
A short time prior to the signing of the armistice a Labor Supply
Section was created in the Industrial Relations Division to deal
with the matter. This section did not have sufficient time to demon-
strate its usefulness, but it probably would have served to stabilize
the situation and would have aided in supplying the additional men
that would have been needed had the war continued. This section
had perfected a system whereby the labor needs of the shipbuilders
might be ascertained and was devising methods whereby the labor
could be supplied to the yards. It was, indeed, getting ready to allo-
cate labor in much the same way in which the Supply Division had
allocated materials.
The most important task which the Labor Supply Section actually
imdertook was its canvass among the demobilization camps. Agents
were placed in the thirty demobilization camps of the country to
spread information about shipyard work to the soldiers, although
work was not guaranteed to anyone. The names of the soldiers in-
terested were filed, and the shipyards were then furnished with the
names of men in their vicinity and put in touch with the returning
soldiers.
V. Employment Management
Prior to 19 18 only thirteen shipyards had employment departments
in any organized form. Yet as the war progressed the problem of
increasing ship production, with a steadily decreasing supply of
workmen in industry, required shipbuilding managers to give special
attention to securing, placing, and maintaining a competent and
adequate force of workers. It has been found that in many cases the
greatest handicap to production is not the scarcity of men but the
attempt to choose and retain employees without careful thought or
plan. Accordingly the Industrial Service Department of the Fleet
Corporation at first conducted pioneer educational activities to
promote the establishment and improvement of properly functioning
326 TRADE UNIONISM AND LABOR PROBLEMS
employment departments. The Employment Management Branch
of the Industrial Relations Division later cooperated with certain
universities in training employment managers, provided the shipyards
with detailed plans for employment departments to meet their
" respective needs, and assisted in placing employment managers and
■ assistants as openings for them developed.
The more tangible results of this work may be indicated. In addi-
tion to correspondence, conferences, printing manuals, and organizing
employment managers' associations, surveys of employment methods
were made in fifty- two yards. Direct assistance was given in im^
proving their procedure and in planning fourteen employment and
service buildings. Standard forms on employment procedure, han-
dling labor loss, physical examinations, labor adjustment, and other
approved practices were prepared and made available to all yards.
Forty-one representatives of shipbuilding companies took the
employment-management courses. Twenty-nine men were also
trained as reserve employment managers, and from these twenty-
three were placed as employment and service managers and assistants.
New centralized employment departments were established in twenty-
one shipyards.
These various imjprovements have probably contributed to the
stabilization of labor employed in shipbuilding. Complicating factors
due to the unsettled industrial conditions of war time, especially
aggravated in the expanding shipbuilding industry, enter into the
situation and prevent a fair comparison of different periods as to
the stabilizing effects of proper methods of employment management.
No conclusions, therefore, are deducible from the chart of the per-
centage of labor turnover, given later in this article, as to the effect
of improved employment procedure on turnover. Further experience
alone can provide data upon which to base reliable deductions.
VI. The Training of Men
The mere addition of 285,000 men to shipyards did not solve the
problem of building ships. A large percentage of these men had to
be trained. In November, 19 17, this work was organized and two
methods were adopted : (i) that of training skilled shipyard crafts-
men to become instructors and (2) that of using these instructors
- SHIPYARD LABOR ADMINISTRATION 327
as teachers of green men upon the job in the shipyards to which
they returned.
Thirty-seven training centers for the training of instructors were
established, covering all sections of the country. Approximately iioo
instructors were given the six weeks' training course, the aim of which
was to enable them to teach what they already knew. The men who
had been given the instructor training returned to the seventy-one
yards from whence they had been sent and started to train workmen
on the job.^
These training courses in the shipyards were brought under the
control and supervision of the Fleet Corporation by an ingenious
Si-a-day bonus given to those yards with properly established training
departments, which was to be shared equally between learner and
employer if the learner should stay in the employ of the yard for
seventy-eight days.
Of the 285,000 which were added to the shipbuilding rolls from
October, 191 7, to October, 1918, it is probable that one half went
into types of work for which little or no training was required. The
remaining half, or approximately 140,000 in all, did need training.
How far was this need met by the training system which was set up
by the Fleet Corporation ? Careful estimates made by the Education
and Training Section indicate that the 11 00 instructors trained ap-
proximately 80,000 men, or about 57 per cent of all that needed
training.
It was possible to do this because it was found that men could
be trained for shipbuilding trades in a relatively short period of time.
Statistics from twenty-one yards indicate that the average training
period for all men was nineteen days."
Table II shows the length of training period by trades. When the
learners left their training course they were able in the main to hold
their own with experienced journeymen, while in certain cases they
even excelled the journeymen in the latter part of their training
period. The men who were thus taught trades were drawn principally
from unskilled shipyard work and from manufacturing. The fact
^AU but three of these were steel-ship yards. The system of training was
not adopted by wood-ship yards to any extent. , i
' 21 am indebted for these statistics to Mr. E. E. MacNary, head of the Edu-
cation and Training Section.
32 8 TRADE UNIONISM AND LABOR PROBLEMS
that these men could be adapted to specific trades in so short a time
throws an interesting sidelight upon the amount of skill required
in modern industry under the division of labor. One of the most
notable contributions to the theory of vocational education was the
fact that these men were trained on the job at actual processes under
normal working conditions. Supervised by an instructor, they worked
in groups alongside of other groups of experienced workmen. It is
noteworthy that they did better work in these cases than when they
were attached to "school hulls"; that is, hulls upon which only
learners were employed.
Table II. Length of Training Period for Twenty Trades in Twenty-
one Yards, Covering 9700 Men
Teadb
Average Days
FOR Each Trade
Trade
Average Davs
FOR Each Trade
Riveters .......
Holders-on
Heaters
Ship ■ fitters
Chippers
Drillers ......
Reamers
Bolters ......
Linermen
Erectors
28
14
10
SI
28
13
12
10
8
20
Machinists . .
Pipe fitters . .
Regulators . .
Gas welders
Electric welders
Burners . . .
Punchmen . .
Ship carpenters
Hand calkers .
Tank-testers . .
39
39
12
30
28
23
21
48
34
33
Other educational activities carried through by the Education and
Training Section were (i) supplementary industrial training for
journeymen by means of short courses on the principles of their
trade; (2) technical education for members of the supervisory
force; (3) electric welding, in which, through the efforts of the
Education and Training Section, a new technic was developed, as
well as instructors trained ; and (4) foremen-training.
It is not too much to state that the education and training carried
through by the Fleet Corporation was a notable achievement in
the field of vocational education.
SHIPYARD LABOR ADMINISTRATION 329
VII. Health and Sanitation
It is impossible to appraise fully and accurately the effect on pro-
duction of the medical and sanitary measures that were fostered by
the Industrial Relations Division to improve and maintain the
physical welfare of shipyard workers. But the Health and Sanitation
Section, which has now become a part of the Public Health Service,
functioned effectively in dealing with the concrete problems facing
it. The field sanitary engineers inspected the shipyards every thirty
days. The section supervised and organized first-aid work for injured
men and provisions for medical attention, dispensary and hospital
facilities, medical inspection, and quarantine. It improved the sani-
tation about the shipyards as to water supply, toilets, sewage dis-
posal, bathing facilities, pure food, and mosquito extermination.
State and local communities were directly induced to appropriate
$672,000 for exterminating mosquitoes in shipbuilding districts, and
the mosquito nuisance was reported to have been virtually eliminated
at Hog Island and at the shipyards of Chester, Pennsylvania,
and Camden and Gloucester, New Jersey. Epidemics of smallpox
and typhoid fever were successfully handled in seven localities, and
vaccine and tj^hus serums were supplied to all yards when needed.
Special aid was rendered during the influenza epidemic, and where
the scourge threatened serious curtailment of shipbuilding temporary
hospitals Were erected.
A comprehensive survey of medical and sanitary conditions in
shipyards has also been recently undertaken, with a view to having
a basis of facts upon which to proceed henceforth. Much remains
to be accomplished before adequate sanitary standards may be said
to obtain in every shipyard, but the measures already pursued have
been of decided educational and material advantage.
VIII. Safety Engineering
The newness of the industry, the inexperience of the men and the
management, and the haste with which shipyards were constructed
and ships built would be expected to lead to a vastly increased rate
of personal injuries to ship workers. In the early months of the war,
indeed, signs were not wanting that such was the case. The stories
about the dangerous character of the work which were so widely
330 TRADE UNIONISM AND LABOR PROBLEMS
circulated in the late months of 1917 and the early winter of 191S
were not wholly products of enemy propaganda. In many cases they
but mirrored the true condition of affairs.
The work of the Safety Engineering Section in meeting this situa-
tion has been most notable. Although established in January, 1918,
it was not until the creation of the Industrial Relations Division
that its district organization was authorized and began to function.
Prior to this time only 8 per cent of the shipyards had safety or-
ganizations. The district safety engineers made it their practice to
begin by interesting the officials of a shipyard company. Central and
departmental safety committees were then promoted, and in yards
which were large enough safety engineers were appointed by the
company. Safety conferences and committee meetings were held, at
which the district safety engineers made addresses. Pamphlets were
distributed and bill posters exhibited, all emphasizing the necessity
of safety measures to the employees. Surveys of yard conditions
were conducted, and standard safety specifications for plant con-
struction and equipment were furnished to all yards. On January i,
1919, over 70 per cent of the yards had safety organizations, or nearly
a ninefold increase over the number six months before.
It is possible to compare the pre-war accident rates with those of
the war period after safety measures had been partially set up.
Chaney and Hanna's study of accident and accident prevention in
marine building shows that in steel-ship yards in 19 12 there were
217.8 accidents causing loss of a day's work or more for every 1000
full-time workers per year, or 18.2 per month.^ Statistics gathered for
the last quarter of 19 18 from twenty-four ts^ical steel yards employ-
ing over 100,000 men show the following accident frequency per 1000
workers in attendance per month :^
Accident-
Month Frequency Rate
October ■ 5-3
November 6.9
December 8.1
These statistics show a decrease in accident frequency to a point
slightly over one third of the former rate.
1" Accidents and Accident Prevention in Machine Building," U.S. Bureau
of Labor Statistics, Bulletin No. 216, p. 30.
2 This includes men working in shipyards pn both hulls and boilers.
SHIPYARD LABOR ADMINISTRATION 331-
The frequency rate computed on the same basis for forty-one wood-
ship yards, employing approximately 35,000 men, was as follows:
Accident-
Month Frequency Rate
October 9.5
November 1 1 .4
December 9.1
It is important, however, not only to ascertain the decline in the
frequency of accidents but also to determine whether the relative
severity of accidents decreased. As is well known, a standard weight-
ing system for accidents- has been devised by Dr. Chaney. A sub-
stantially similar one was used by the Safety Engineering Section,
so that the results are comparable.^ Dr. Chaney found that in steel-
ship building in 19 12 accidents caused a loss of eight days for every
full-time worker per year, or 0.66 days per month.^
The accident-severity rate per month during the last quarter of
1918 for the twenty-four steel-ship yards furnishes an interesting
comparison with this. Accident-Severitv
Rate (Days per
Month . Month)
October 0.791
November 0.401
December °-444
It will thus be seen that the severity rates, with the exception of
October, were substantially lower than in the pre-war period.
In the forty-one wood-ship yards, however, the record was not
so favorable. Accident-Severity
Rate (Days per
Month Month)
October 1.172
November 0.970
December 0.899
ilf anything, the rating adopted by the Safety Engineering Section was
slightly more severe.
?This should not be interpreted to mean that these days were actually lost
during the specific year or month. It merely means that accidents which
occurred during this time caused either during that year or in future years a
loss of this amount of time. For instance, Dr. Chaney rates a death as gooo
working-days. Thus the loss of time due to this accident would be spread over
thirty years.
332 TRADE UNIONISM AND LABOR PROBLEMS
Although more detailed statistics are not available for months since
December, 1918, the facts at hand seem to indicate that there has been
a somewhat steady decrease in the frequency and severity of accidents.
It seems probable that, as a result of safety measures, from 12,000 to
13,000 fewer accidents occurred during the last quarter of 1918 alone
than would have occurred had the pre-war conditions existed.^ Such a
showing is all the more remarkable when the sudden expansion of the
industry and the addition of nearly 300,000 "green men" is considered.
The reduction of accidents effected by the Fleet Corporation, how-
ever, not only saved many lives and much human loss but also
materially reduced the labor cost to shipbuilding companies and thus
to the Fleet Corporation. Sixty-nine shipbuilding companies were
enabled to secure a reduction in their insurance premium because of
the safety measures introduced at the instance of the Safety En-
gineering Section. This reduction totaled in all several millions
of dollars.^
IX. The Instability of Labor
Table III shows the labor turnover from January to September,
19 1 8, for 90 representative companies, which in September em-
ployed 273,632 shipbuilders. The table shows the following:
I. That the turnover for the country as a whole was at an annual
rate of over 200 per cent in practically every month. In some months
1 While reading the proof of this article, a further study by Dr. Chaney ap-
peared which affords a basis for further comparison. Dr. Chaney, after a study
of the 1917 accident rates in several long-established shipyards, finds that, though
the accident-frequency rates decreased from 217.8 for every 1000 full-time
workers per year as in igi2 to 60.9 in 1917, the accident-severity rates increased
from 6.6 to 10.8. It is probable that the newly established yards had a much
higher frequency rate in 1917 and the early part of 1918 than these long-
established yards and that their accident-severity rate was as high if not higher.
The work of the Safety Engineering Section, therefore, appears to be even more
effective than indicated above as respects the decrease in the severity of acci-
dents, although it is possible that its influence in causing a decline in the fre-
quency of accidents was not as great as might be expected from the 191 2 figures.
For the later study of Chancy's, see U. S. Bureau of Labor Statistics, Monthly
Labor Review, Vol. VIII, No. 4 (1919), p. 16.
2 As has been explained, the increased labor cost caused by the decisions of
the Adjustment Board was ultimately paid for by the Fleet Corporation. The
increase in wages necessitated a consequent increase in insurance premiums,
which was chargeable against the Fleet Corporation. A reduction of the insur-
ance premium, therefore, decreased the amount which the Fleet Corporation was
compelled to reimburse.
SHIPYARD LABOR ADMINISTRATION 333
it was as high as 30c per cent. In other words, it was necessary to
hire from three to four men in a year in order to increase the working
force by one.^
2. The turnover for wood-ship yards was sHghtly less than thai
for steel yards.
3. The turnover for the three fabricating yards ^ was the highest of
all types of construction, averaging 447 per cent for the nine months.
4. The turnover was heaviest in the Pacific Coast yards and those
north of Chesapeake Bay, while it was lightest in the yards of the
Great Lakes and those of the Middle Atlantic district (Chesapeake
Bay to Wilmington, North Carolina). It is not an accident that the
districts where the turnover was the heaviest were those where there
had been the greatest violation of the Macy scale and the heaviest
competitive bidding for labor by the shipyards.
5. The turnover was lightest in the winter months and increased
during the late spring, summer, and fall. It is difficult to tell whether
this was purely a seasonal variation or whether it was due to the
competitive bidding for labor in excess of the established scale. This
latter factor made the situation worse as time went on.^
iThe method of calculating the labor turnover was as follows: The number
of shipbuilding employees on the pay roll for each week during each month
was added, and the sum was divided by the number of weeks in the month.
This method secured the average number on the pay roll. The average number
of shipbuilding employees on the pay roll was divided into the number of ship-
building employees replaced during the month, giving the turnover percentage
for the month. The monthly turnover percentage was reduced to a yearly basis
for purposes of uniform comparison by multiplying the monthly percentage by
the factor 10.4 (that is, «S divided by 5) when five weeks were included in the
month, and by 13 (that is, 52 divided by 4) when four weeks were included in
the month. When the pay roll was increasing, the number of men replaced
would be the number lost from the pay roll (in operations), while when the
pay roll decreased the number of men replaced would be the total number hired.
2 Fabricating yards are so termed because there is no fabricating done at
them ! The parts are prepared at various otlier plants and shipped to these
yards, where they are assembled. The term "assembling yards" would be much
more accurate.
3 Dr. Boris Emmet's study in an automobile establishment indicates that the
labor turnover in that plant uniformly increased during the spring and summer
months and decreased during the winter. This may be due to the greater preva-
lence of employment during the summer months, which entices workmen from
job to job, while in the winter they feel that they should hold on to whatever
jobs they have. See "Labor Turnover and Employment Policies of a Large
Motor Vehicle Manufacturing Establishment," U. S. Bureau of Labor Statistics,
Monthly Labor Review, Vol. VII, No. 4 (1918), pp. 1-18.
334 TRADE UNIONISM AND LABOR PROBLEMS
Table III
Turnover Percentages for Shipbuilding Employees
(Yearly Basis)
No. OF
Districts
Yards
REPORT-
ING
Every
Month
1
1
SI
u
s
1
•J
<
1
D
D
D
<
u
M
oa
S
H
So
U
z <
Q <
X 5
SO'
Steel-Ship Yards
North Atlantic
7
202
i6s
178
195
168
170
196
243
225
180
'77
219
194
Delaware River
6
189
204
146
153
183
199
170
224
257
176
I do
214
■93
Middle Atlantic
2
iir
112
131
iiS
lOI
140
190
270
191
117
119
218
.58
Southern
4
176
212
134
143
134
168
160
199
174
147
149
175
163
Gulf
No steel-ship building companies in this district
Great Lakes
14
219
199 233 192 181 138 igo 196 205 214 168
195
190
North •Pacific
8
1S4
234 276 374 362 407 369 332 313 229 380
340
321
No. II
No steel-ship building companies in this district
South Pacific
4
262
329
371
24S
237
256
270
244
198
317
246
238
256
Fabricating yards
3
287
205
213
114
131
277
257
543
705
220
195
489
447
All districts
4S
201
216
226
2l5
205
229
235
298
242
212
,216
251
231
Wood-Ship yards
North Atlantic
12
197
209 1 246 1 198 1 172 1 169 1 240 1 211 1 224 1 216 1 176
230
208
Delaware River
No wood-ship building companies in this district
Middle Atlantic
. 2
163
217
55
i5i
90
134
231
112
79
117
122
145
134
Southern
4
276
82
146
2og
197
221
360
217
276
151
204
284
240
Gulf
5
217
247
260
189
258
335
254
212
268
239
273
245
253
Great Lakes
I
190
35
46
189
138
0
356
404
348
87
122
406
162
North Pacific i
6
197
172
281
263
271
247
249
263
235
210
260
248
245
No. II
7
178
122
174
239
224
244
278
222
250
158
235
251
223
South Pacific
5
144
183
257
20s
170
242
23.
J74
203
19s
204
220
208
Fabricating Yards
No wood-ship building
companies in this district
All districts
42
192
176 222 218 214 234
266
220
242
194
223
244
225
Description of districts: North Atlantic — all yards north of Newark, New
Jersey; Delaware River — all yards on Delaware River; Middle Atlantic — all
yards on Chesapeake Bay, Potomac River, and Atlantic Coast from Baltimore,
Maryland, to Wilmington, North Carolina; Southern — all yards from Wilming-
ton, North Carolina, to Mississippi River; Gulf — yards west of Mississippi on
the Gulf; Great Lakes — all yards on Great Lakes; North Pacific — all wood-
ship yards in Washington save those on the Columbia River (which are in
District 11) and all steel-ship yards in Washington and Oregon; District 11 —
all wood-ship yards in Oregon and on Columbia River, save those of Coos
Bay; South Pacific — all California yards and those of Coos Bay, Oregon.
Turnover is not the only factor in the instability of labor. Though
absenteeism is often confused with turnover, it is really a separate
item. Absenteeism differs from turnover in that while turnover
SHIPYARD LABOR ADMINISTRATION
335
represents a changing of positions, absenteeism represents the ab-
sence from a position while one is employed.
Table IV shows the percentage of attendance of all employees (not
shipbuilders alone) in 90 representative companies. These com-
panies employed over 320,000 workmen in September, 1918.^
Table IV. Average Percentage of Pay Roll in Daily Attendance
FOR All Employees
No. OF
Districts
Yards
Report-
ing
Every
Month
<
•-I
i
a
<
5
s
H
D
OS
M
H
u
u
•A
Steel-Ship Yards
North Atlantic
7
tj.q
68.0
71.0
73 -o
78.1
79.1
79.7
83.3
78.3
69.0
77.0
80.4
76.3
Delaware River
6
73.8
78. .S
84.7
85.4
84.2
86.8
84.0
85.7
81.2
79.1
8S.4
83.6
83.1
Middle Atlantic
2
64..
72.1
77-1
76.4
7S.7
82.3
77.2
74.6
So. 2
71-3
79-3
77-3
76.S
Southern
4
89.1
89.4
84.6
80.5
84.6
84.1
86.3
86.4
85.9
87.3
S3.4
86.2
85.5
Gulf
No steel-ship building companies in this district
Gitat Lakes
14
77.D
79.4 83.1 84.5 83.7 88.8 86.0 86.5 83.8 79.9 85.6
85.4
84.2
North Pacific
8
q2.4
89.5 88.2 88.9 89.5 87.7 85.1 85.6 83.3 90.1 88.7
84.7
87.6
No. II
No steel-ship building companies in this district
South Pacific
4
90.9
88.1
87.9
88.8
90.5
92-5
88.8 94.D
82.5
88.7
90.7
88.4
89.3
Fabricating yards
' 3
61.S
73-5
77-4
73-9
32.2
87.2
83.4 80.3
82.2
69.8
81.5
82.0
78.4
All districts
48
74.0
78.3
81. 1
81.0
84.0
86.6
S3. 9 84.S
81.7
77-7
84.0
83-5
82.2
Wood-ship Yards
North Atlantic
12
79-3
76.7l83.1l84.ol86.2l87.8i86.8l 88.6 Iso.sl 80.0 1 86.3
85.5
84.9
Delaware River
No wood-ship building con^panies in this district
Middle Atlantic
2
69.0
77-1
76.5
74-7
79.1
79-9
78.i
83.8
79.2
74-3
78.6
80.0
78.7
Southern
4
78.2
79.0
83.8
80.7
79-9
86.4
80.1
81.4
77-9
80.6
82.6
79-7
80.9
Gulf
S
74.0
80.4
82.8
85.0
83-7
80.S
80.Q
78.4
77.8
79-5
S3.1
78 .8
80.6
Great Lakes
I
81.4
74.2
95-3
92.6
85.9
89.7
98.3
lOO.O
99-7
82.5
89.2
99.2
88.6
North Pacific
6
90.7
89.0
90.1
90.5
93 -o
92.7
91. 1
94-3
90.4
>9.9
92-3
91.8
91.6
No. II
7
91.9
90.9
90.7
91.4
91.7
92-5
S9.3
93-3
92.4
91. 1
91.9
91.5
91.6
South Pacific
5
90.2
87.2
89.1
90.1
93-2
94.2
92.7
95.1
92.6
S8.9
92.6
93-4
92.0
Fabricating yards
No wood-ship building companies
in this district
AU districts
42
84.7
84.1 86.8 87.2 j 87.8 88.6 1 86.5 1 88.7
84.8
85-3
87.9
86.6
86.8
iThe method of computing attendance figures was a:s follows: The average
daUy attendance for each week is calculated by adding the attendance for all
the days of the week save Sunday, and dividing by 6. The ratio of this average
daily attendance to the total number on the pay roll expressed in percentage
gives the average attendance. The difference between this and 100 per cent is
the amount of absenteeism for the week. To reduce this to a monthly basis,
336 TRADE UNIONISM AND LABOR PROBLEMS
It must be clearly realized that this percentage of absenteeism
merely measures the number of full days lost. It does not include
absenteeism resulting from (i) half-days absent and (2) tardiness.
The real amount of absenteeism, therefore, is probably greater than
that indicated by the statistics given.
The following facts appear from Table IV :
1. That the percentage of days lost per month for the country as
a whole ranged in steel-ship yards from 26 to 13.3 per cent and in
wood-ship yards from 15.9 to 11.4 per cent. The average absenteeism
for the nine months in the steel-ship yards was 17.8 per cent; in
the wood-ship yards, 13.2 per cent.
2. That absenteeism was approximately 25 per cent less in the
wood-ship yards than in the steel-ship yards.
3. That absenteeism was- higher in the winter months than in the
spring and summer. This was particularly true of the steel yards.
Climatic reasons were undoubtedly a large factor.
4. That absenteeism is highest in the yards of the Northern At-
lantic States and lowest in those of the Pacific Coast. Here again it
is probable that the equable temperature of the Pacific Coast was
responsible in a large part for the better showing made by these yards.
. EVALUATION OF RESULTS
I. Principles Underlying the Labor Policy of the Fleet
Corporation
Had the managers of the Fleet Corporation been asked, " What is
the philosophy upon which your rulings and policies are based?"
they would probably have replied, "We have none. We are here to
build ships." Speed was their aim. They wanted results. The multi-
tude of questions that poured in upon them were decided, therefore,
in the light of this purpose and not by a priori theories. From the
a somewhat complicated procedure is followed, whereby four months during
the year are treated as including five weeks and eight months as including four
weeks, the aim being to make the weekly periods and the monthly periods coin-
cide as evenly as possible. The percentage of attendance for the respective
number of weeks in the month is added, and is then divided by the number
of weeks, which gives the average attendance for the month.
SHIPYARD LABOR ADMINISTRATION 337
accumulation of their decisions, however, the student can detect cer-
tain fundamental principles being crystallized and an inductive
industrial philosophy being formed, of which the promulgators them-
selves were almost unconscious.
There were really two basic principles upon which the labor policy
was based, the implications of which were perhaps grasped by only
a few : ( i ) The first of these was that the hearty support and cooper-
ation of labor was necessary to attain any modicum of success.
(2). The second was that the ordinary peace-time method of competi-
tion between shipyards was not only inadequate to build the neces-
sary ships under war conditions but was, on the whole, an actual
impediment.
Shipbuilding in war time demonstrated the importance of the
worker. It was possible in peace time, with the plentiful labor supply,
to take less account of labor, but it was impossible in war, for the
success of the whole program depended largely upon the zeal and
efficiency of the laboring men. The Fleet Corporation could not wash
its hands of its labor problem by delegating its responsibility to its
contractors, and could secure the cooperation of labor not by auto-
cratic commands but only by taking the workers into its confidence
and by jointly sharing with them the settlement of their problems.
The creation of the Shipbuilding Labor Adjustment Board was the
most important recognition of this truth which any great industry
in America has ever made, and throughout the administration of
labor matters by the Fleet Corporation it was found absolutely essen-
tial to secure the cooperation of the workers themselves. Many of
the charges that the workmen have been "coddled" come from
those who do not understand the significance of labor which the war
has revealed. Such statements are based upon the implicit belief that
the workers should do what is ordered by economically stronger
classes and that they should be servants of the state but not members
of the state.
The other basic principle, namely, the supplementing and restrain-
ing of competition, did not manifest itself so quickly, but it emerged
after a time as a necessity.
It was necessary to supplement competition, because the work per-
formed by the Education and Training, the Safety Engineering, and
the Health and Sanitation sections, together with the Employment
338 TRADE UNIONISM AND LABOR PROBLEMS
Management Branch and other agencies of the Corporation, would
never have been performed by the shipbuilders themselves, for the
following reasons :
1. While it was for the interest of the industry as a whole that
these facilities should be provided, it need not have been for the
interest of any particular yard to perform these functions. If an
employer, for instance, provided training for his men at his own
expense, there was every likelihood that some other shipyard which
had not undergone the expense of training men would offer these
men, once trained, more than their original employer could pay and
would thus entice them away. The offering of these advantages by
a central agency, such as the Fleet Corporation, however, relieved
any individual yard of the burden and extended these facilities to
the industry as a whole. Though the movement of newly trained men
from yard to yard still continued, nevertheless the industry as a whole
possessed these trained workmen, a gain which would hardly have
materialized had the Fleet Corporation depended upon the initiative
of individual employers to furnish them.
2. It was necessary for the Fleet Corporation to provide these
services not only because it was not to the economic interest of
individual shipyards but also because of the ignorance on the part
of many shipbuilders of what was actually to their economic interest.
It was not easy for the owners to understand that good health,
safety measures, and efficient employment methods meant an in-
creased output. The Industrial Relations Division performed valu-
able educational work in impressing the necessity for these measures
upon indifferent and even hostile concerns.
3. By reason of the nation-wide extent of the organization^ im-
provements in matters relating to labor could be pooled and then
quickly extended, to all other plants instead of being confined to a
few. Illustrations of this can be drawn from such diverse items as
the invention of an appliance which lessened the vibration in riveting,
methods of managing plant cafeterias, and a plan devised by one
district representative of organizing shop committees.
The officials of the Corporation slowly learned, moreover, that
competition must be restrained as well as supplemented. This was
first learned in the supplying of raw material to the shipyards. It was
necessary to centralize the purchasing and distribution of steel, of
SHIPYARD LABOR ADMINISTRATION 339
lumber, and of other materials, because each plant tried to "play
safe " and accumulated more than it needed. Some yards were con-
sequently unable to get the raw materials that they needed. It be-
came almost equally necessary to restrain the competitive methods
of attracting labor. The treating of the Macy rates as maxima as
well as minima was only one step in the attempt to prevent firms
from enticing labor from other shipyards. The Corporation expressly
forbade a concern to take men intentionally from other yards, it used
all its influence to punish yards which had so offended, and it tried
to bring about the return of the men who had been enticed away.
In the fall of 19 18 the Corporation found it necessary to regulate
advertising for labor, which many concerns were conducting in-
judiciously, and it issued a General Order regulating advertising,
which is perhaps unique. By it shipyards were forbidden to state
any special advantages in the form of wages or working conditions
and were required to state that they would not employ anyone
working in another shipyard.'^
II. Defects and Merits
So great was the necessity for haste that it is small wonder mistakes
were made in building up from nothing a system of labor administra-
tion and control. Rather is it remarkable that the mistakes were
upon the whole so few, and that the conspicuous merits far out-
weighed them ; but both mistakes and merits alike are of distinct
service in pointing out what labor policy a nation should pursue in
war time and in peace time as well.
Among the most important defects were :
I. Delay in setting up an adequate administrative machinery to
enforce the rates authorized by the Shipbuilding Labor Adjustment
Board. It is perhaps an American characteristic to enunciate a
^ The restrictions imposed were as follows :
1. Every advertisement, whether for skilled or unskilled labor, must contain
the following statements: "No one working in an Emergency Fleet Shipyard
should apply. Wages and working conditions arc the same in all such shipyards."
2. No advertisement, whether for skilled or unskilled labor, shall state
(s) number of men needed; (6) rate of pay; (c) the amount of overtime or
rate of compensation for overtime; (d) housing, welfare work, or similar in-
ducements; (e) inducements in violation of the wages and standards fixed by
the Shipbuilding Labor Adjustment Board.
340 TRADE UNIONISM AND LABOR PROBLEMS
policy and then neglect to provide machinery to see that it is carried
Out, The Fleet Corporation and the Adjustment Board shared in this
American vice. A more thorough organization with several full-time
men in each district should have been created early. The Corporation
was relatively slow to realize the necessity for a separate system of
labor control with administrative decentralization. Had this been
in existence earlier, the violations, both those above and those below
the Macy rates, would have been fewer.
2. A rather loosely administered system of reimbursement for
added labor cost. There can be little question that many yards were
reimbursed, temporarily at least, for amounts in excess of the actual
Macy scale. This was partially caused by a shortage of competent ac-
countants, which rendered the work of detecting these amounts more
difficult, and the necessity for training more and better accountants
was thereby sharply emphasized.
3. A too liberal contract system. Though the contracts for the
Fleet Corporation probably protected the government more than
those of other government departments, yet many were unduly fa-
vorable to the contractor. The cost-plus-percentage contracts, the
number of which became fewer as time went on, directly encouraged
extravagance in labor matters upon the part of the contractor, while
the cost-plus-fixed-fee contracts and agency contracts, where the
Fleet Corporation bore all the expense, did not sufficiently discourage
such extravagance. Costs were often unduly swollen, and an ex-
travagant attitude was created toward labor matters.
4. Failure to provide an adequate labor-requirements machinery.
The Fleet Corporation should have established relatively early a
staff to estimate the labor requirements of the various yards and
the country as a whole, concerning the number and kinds of men
needed at varying periods of time. This should have been roughly
computed from the estimated production program as it varied,
although the uncertainties in the program would have rendered the
work exceedingly difficult. Such estimates could have been checked
up by estimates from the yards themselves. This system would have
furnished the United States Employment Service with an accurate
list of labor requirements and would have guided the various activ-
ities of the Corporation, as, for instance, the Education and Training
Section and other sections. Had such a section been in existence the
SHIPYARD LABOR ADMINISTRATION 341
Shipyard Volunteers' fiasco might have been avoided. It is only fair,
however, to say that such a centralized system of labor requirements
had never been created in the country, and it is not wholly proper
to reproach the officials of the Corporation for having failed to create
such machinery de novo.
5. Failure to acquaint all groups with the real policy of the Fleet
Corporation and Adjustment Board. In a country as large as the
United States the cooperation of all parties cannot be obtained
merely by the action of committees representing both sides. It is
vitally important to educate and inform the rank and file of both
employers and employees as to the reasons for and necessity of the
policies and methods adopted.
The fundamental merits of the work must also be remembered,
however :
1. The necessity of recognizing the principle of collective bargain-
ing and of granting labor a voice in the determination of its own
conditions was demonstrated beyond a doubt.
2. For the first time a great government industry realized the
necessity for a separate and coordinate organization to deal with
labor problems.
3. It was shown that industrial disputes not only should be settled
after the fact but should be headed off by a thorough examination
into and removal of the basic causes of labor unrest. Not only did
this policy prevent interruption in production but it increased the
efficiency of the men while at work.
4. The industry was viewed as a whole, and measures were taken
to supply the needs of all plants, instead of depending upon the
self-interest of the individual contractor to furnish the services for
the industry.
5. The principle of basing wages upon increase in the cost of living
was officially recognized and applied throughout an important in-
dustry. Whatever may be the inadequacies in merely maintaining
the status quo of a standard of living which may have originally been
too low, there can be no question that it was a big improvement over
what would have happened had the market system of adjusting wages
been followed, with all its accompanying friction. Had not the Fleet
Corporation interposed, there is little doubt that the standard of
living, instead of being maintained, would have been impaired.
342 TRADE UNIONISM AND LABOR PROBLEMS
6. During the period after the Shipbuilding Labor Adjustment
Board and the Industrial Relations Division were functioning and
prior to the signing of the armistice, there were no strikes or lockouts,
save of momentary character, in yards doing work for the Fleet
Corporation.^ Industrial peace was thus roughly attained. This
should not be understood to mean that there were no rumblings of
discontent, but merely that no actual interference with production
occurred during hostilities. When the temper of both employers and
workmen is considered, this is perhaps the most outstanding proof of
the success of the efforts of the shipyard labor administration. There
can be little question that had it not been for the Labor Adjustment
Board and the Industrial Relations Division the tonnage built would
have been less by several hundred thousand tons.
THE FUTURE
The Shipbuilding Labor Adjustment Board, though its duration
was not limited by either of the memoranda creating it, was dissolved
on April i. During the months of February and March many efforts
were made to devise some machinery to take its place. The peace-
time problem is naturally different from that of war, if for no
other reason than that the shipyards will soon be producing pri-
marily for private and not for government account. By July i of
this year the wood-ship yards will be practically through with Fleet
Corporation work, while 30 per cent of the steel-ship yards formerly
occupied on government work will be freed for private construc-
tion. By December, 1919, over 60 per cent of the steel-ship ways
will so be free.^
The Emergency Fleet Corporation therefore could no longer pre-
sume to act for the builders as it had been compelled to do during
the war. The shipbuilders themselves, who had not been parties to
the formation of the Board, were the only ones who could enter into
a general agreement with the unions.
iThe Seattle shipyard strike, which led to the general strike, occurred January
21, igi8. This is a story in itself. The 'settlement was in strict accord with the
principles which governed the Shipbuilding Labor Adjustment Board and the
Industrial Relations Division.
2 The prohibition upon the building of steel ships for foreign account has not
as yet been raised, but it is expected that it will be very shortly.
SHIPYARD LABOR ADMINISTRATION 343
After a series of conferences it seems to be undoubted that several
boards will replace the Adjustment Board. After a stormy two weeks'
conference in Washington between representatives of the local unions
and employers from the Paciiic Coast, together with representatives
of the international unions and the Fleet Corporation, an agreement
was drawn up providing for the creation of a board for the Pacific
Coast with ten members, with a continuation of the principal con-
ditions established by the Adjustment Board, save that the forty-
four hour week was established for the entire year, and not merely
for the summer months, as at present. The board, if constituted,
will have power over wages, hours, conditions of labor, classification,
grievances, etc. The local coast unions will undoubtedly have a
larger voice in representing labor on this board than the inter-
national unions, and thus one cause of friction will be removed.
This agreement has been approved by the employers and will
be voted upon by the local imions, by whom it will undoubtedly
be rejected.
Although some employers on the Atlantic Coast and Great Lakes
are refusing to sign collective agreements with the American Fed-
eration of Labor, it is probable that the vast majority of them will
do so. The American Shipbuilding Company, a concern with six
yards on the Great Lakes, has already signed such an agreement.
The two agency yards of the Fleet Corporation (the American Inter-
national Shipbuilding Corporation at Hog Island and the Merchant
Shipbuilding Corporation at Bristol, Pennsylvania) have also signed
such an agreement, as have the various plants of the Bethlehem
Shipbuilding Company. Many others are about to fall in line,
and it is probable that from these individual agreements district
boards for the Atlantic Coast and Great Lakes will ultimately
be built up.
Until some machinery is set up and functioning, the Emergency
Fleet Corporation will maintain the rates and conditions of labor
established by the Adjustment Board and will probably use these
rates as the basis of reimbursement for all its contract settlements,
although of course yards may out of their profits pay the workmen
more than the scale.
Whatever boards are set up will be based upon and will take over
the principles and policies established by the Labor Adjustment
344 TRADE UNIONISM AND LABOR PROBLEMS
Board and the Industrial Relations Division. Thus in this newest
of industries, perhaps chiefly because of the lack of long-established
business inertia, the governmental policies evoked under the stress
of war-time pressure are to be taken over as the basis for future
peace-time action. One, at least, of war's gains is apparently to be
made permanent.
P. H. Douglas
Emergency Fleet Corporation
F. E. Wolfe
Ohio Wesleyan University
PART IV. LABOR UNIONS
XXIV
TRADE-UNIONS VERSUS SHOP COMMITTEES"
AT THE Convention of the American Federation of Labor in
1\. 19 1 8 the following resolution was adopted on the recom-
mendation of the Executive Council :
Betterment for wage-earners under all circumstances depends upon
the control they exercise through economic organization. Control
brings with it responsibility. The right of workers' to a share in the
results of increasing production, which makes possible their advance-
ment and reproduction under proper conditions, means greater interest
in increasing output.
The Executive Council believes that in all large permanent shops
a regular arrangement should be provided whereby :
First, a committee of the workers would regularly meet with the
shop management to confer over matters of production ; and whereby :
Second, such committee could carry, beyond the foreman and the
superintendent, to the general manager or to the president any im-
portant grievance which the workers may have with reference to
wages, hours, and conditions.
It is fundamental for efficiency in production that the essentials
of team work be understood and followed by all. There must be
opportunity for intercourse and exchange of viewpoints between
workers and managers. It is this machinery for solving industrial
problems that is fundamental.
The constructive demands outlined above are predicated upon the
basic principle of the right and opportunity of workers to organize
and make collective agreements. There is no other way to bring
about cooperation for production except by organization of workers.
1 From Proceedings of the Thirty-eighth Annual Convention of the American
Federation of Labor (1918), pp. 85, 329, 330.
345
346 TRADE UNIONISM AND LABOR PROBLEMS
Organization is the orderly system for dealing with questions which
concern labor in order that decisions and adjustments may be reached
that further the best interests of all concerned. Employers and
workers must talk over matters of mutual interest and reach under-
standings. In present large-scale industry this can be done only
by the use of the representative system, or what is commonly called
collective bargaining, which is the foundation of all effective just
labor administration.
This was followed at the Convention of 1919 by the following : ^
Resolution No. 201 — By request of the National Committee for
Organizing the Iron and Steel Workers.
Whereas, Many steel corporations and other industrial institutions
have instituted in their plants systems of collective bargaining akin
to the Rockefeller plan; and
Whereas, Extensive experience has shown that while the employ-
ers are busily carrying on propaganda lauding these company unions
to the skies, as a great improvement over trade-unions, they are at
the same time just as actively enforcing a series of vicious practices
that hamstring such organizations and render them useless to their
employees. Of these practices the following are a few:
1. Unfair elections and representation. The first essential for the
proper working of a genuine collective-bargaining committee is that
it be composed entirely as the organized workers may elect and
altogether free from the company's influence. Only then can it be
truly representative of the men and responsive to their wishes. Upon
such committees bosses, representing as they do the antagonism of
the company, are so much poison. Not only is it impossible for
them personally to represent the men but they also negate the in-
fluence of the real workers' delegates. Knowing this very well, the
steel companies, through campaigns of intimidation and election fraud,
load their company-union committees with bosses, usually to the
point of a majority. So baneful is this practice that were the com-
pany unions otherwise perfect it alone could suffice to entirely destroy
their usefulness to the workers.
2. No democratic organization permitted. It is common knowledge
that in order for the workers to arrive at a uniform understanding
1 Proceedings of the Thirty-ninth Annual Convention of the American
Federation of Labor (1919), p. 302.
TRADE-UNIONS VERSUS SHOP COMMITTEES 347
through the systematization and formulation of their grievances and
demands it is necessary for them to enjoy and practice the rights
of free speech, free assembly, and free association. They must con-
duct an elaborate series of meetings under their own control and
generally carry on their business in a democratic, organized way. But
with the company-union system this is impossible. All independent
organization and meetings are prohibited on pain of discharge. Conse-
quently the workers are kept voiceless and destitute of a program.
They are deliberately held down to the status of a mob. Under such
circumstances intelligent, aggressive action by them is out of the
question. I
3. Intimidation of committeemen. As part of the general plan to
keep their company unions from being of any possible service to their
employees it is customary for the companies to summarily discharge
committeemen who dare to make a stand in behalf of the workers.
The records show a multitude of such cases. Being unorganized, the
men are powerless to defend their representatives. The natural conse-
quence is that the committees soon degenerate into groups of men
supinely subservient to the wishes of the company and deaf to those
of the workers.
4. Expert assistance prohibited. When dealing with their em-
ployees in any manner, employers always thoroughly safeguard them-
selves by enlisting the aid of the very best brains procurable. The only
way the workers can cope with this array of experts is to have the
help of experienced labor leaders, but under the company-union
system this is impossible. All association with trade-union officials
is strictly prohibited. The company reserves to itself the right to
expert assistance. As a result the green workers' committee, already
weakened in a dozen ways, is left practically helpless before the
experts upon the company's side.
5. Company union lacks power. In establishing wages, hours,
and working conditions in their plants employers habitually use
their great economic power to enforce their will. Therefore, to secure
just treatment the only recourse for the workers is to develop a
power equally strong and to confront their employers with it. Unless
they can do this their case is hopeless. In this vital respect the
company union is a complete failure. With hardly a pretense of
organization, imaffiliated with other groups of workers in the same
348 TRADE UNIONISM AND LABOR PROBLEMS
industry, destitute of funds, and unfitted to use the strike weapon,
it is totally unable to enforce its will, should it by miracle have one
favorable to the workers. Weak and helpless, all it can do is to
submit to the dictation of the company. It can make no effective
fight for the men.
6. Company diverts aim. As though the foregoing practices were
not enough to thoroughly cripple the company unions, the employers
make assurance doubly sure by seeing to it that their committees
ignore the vital needs of the workers and confine themselves to minor
and extraneous matters, such as fake safety-first movements, prob-
lems of efficiency, handing bouquets to high company officials, etc.
Discussions of wages, hours, and working conditions are taboo on pain
of discharge for the committeeman who dares insist upon them. Thus
the company unions complete their record of deceit and weakness by
dodging the labor question altogether.
Whereas, In view of the foregoing facts, it is evident that com-
pany unions are unqualified to represent the interests of the workers,
and that they are a delusion and a snare set up by the companies for
the express purpose of deluding the workers into the belief that
they have some protection and thus have no need for trade-union
organization; therefore, be it
Resolved, That we disapprove and condemn all such company
unions and advise our membership to have nothing to do with them ;
and, be it further
Resolved, That we demand the right to bargain collectively
through the only kind of organization fitted for this purpose — the
trade-union — and that we stand loyally together until this right
is conceded us.
XXV
TENDENCIES IN TRADE-UNION DEVELOPMENT^
A TRADE-UNION," according to one authority, "is a continuous
association of wage-earners for the purpose of maintain-
ing or improving the conditions of their employment."^ A trade- ;
union, although usually including benevolent and fraternal features,
is something more than a mere fraternal order which might easily be
a continuous association of wage-earners. The purpose of maintain-
ing or improving conditions of employment involves means and ends
and a more or less fixed policy which makes an organization a trade-
union. Trade-unionism involves collective bargaining as over against
individual bargaining for wages and conditions of employment and
the use of the strike as a weapon of last resort in enforcing demands.
A number of American trade-unions began as mutual benevolent and
fraternal societies and have become under economic pressure regular
labor organizations. A similar development is now going on in a
number of organizations resembling in some respects trade-unions,
and it is the purpose of this paper to show if possible by the study of
concrete instances the trend of this development.
The dividing line between fraternal or beneficiary organizations
and trade-unions seems to lie in the matter of collective bargaining
and in the attitude towards strikes. The National Association of
Stationary Engineers, for example, which was organized in 1882, lays
stress upon educational and beneficiary features and declares that
"this Association shall at no time be used for the furtherance of
strikes, or for the purpose of interfering in any way between its
members and their employers as to wages." ^ Strikes, moreover, it is
urged, are unnecessary because of the identity of interest between
^From Quarterly Journal, University of North Dakota, Vol. IX (1919),
pp. 169-180.
2 Sidney and Beatrice Webb, History of Trade Unionism, p. i. 1902.
^The National Engineer, February, 1904, p. 34; Preamble, Constitution
(1914), p. 3.
349
350 TRADE UNIONISM AND LABOR PROBLEMS
employer and employee. To this the trade-unionist would say that
educational and beneficiary features are useful, and that there is an
identity of interest up to a certain point, but that without collective
bargaining it is impossible to utilize the legitimate power of com-
bination that comes with trade-union organization. Moreover, col-
lective bargaining would be the rule, and strikes would be abolished,
as soon as an industry should become completely unionized.
The trend of present-day development may be readily seen by an
examination of the policies of various organizations which, on account
of more or less similarity, may be divided into the following four
groups : ( I ) organizations whose members are employed directly by
the federal government; (2) unions formed of men holding federal
licenses; (3) train-service organizations whose members are em-
ployed on the railroads ; and (4) a miscellaneous group at various
stages of development.
I. FEDERAL GOVERNMENT EMPLOYEES
In this group are found such organizations as the National Fed-
eration of Post Office Clerks, the Brotherhood of Railway Postal
Clerks, the National Federation of Postal Employees, the Railway
Mail Association, the National Association of Letter Carriers, and
the United National Association of Post Office Clerks. These are
all fraternal and beneficiary associations whose aim is to cooperate
with the postal department as to classification, wages, hours of labor,
and the upholding at all times of civil-service rules.^ Most of these
organizations have developed into regular trade-unions and have
affiliated with organized labor " despite Postmaster General Burleson's
known opposition and declaration concerning the menace in postal
unions."
The National Federation of Post Office Clerks is a typical illustra-
tion of the development of postal unionism. Beginning as merely a
fraternal and beneficiary organization, it became a regular trade-
union primarily through need of affiliation with organized labor to
secure through combined effort better working conditions and higher
pay. The present status of the Federation is shown by its being
affiliated with the American Federation of Labor, by the fact that its
1 Constitution, Letter Carriers, 1911, Article II, Section i.
TRADE-UNION DEVELOPMENT 351
objects are the social and economic advancement in every lawful way
of its members, and by its sympathy with the trade-union movement.^
However, at its national convention in 191 1 a resolution was adopted
putting it "on record as most emphatically opposed to strikes in the
postal service as a means to bring about the improvement of working
conditions in the service."^ A "Post Office Appropriation Bill,"
passed in August, 191 2, provides that membership in associations
like the foregoing "shall not constitute or be cause for reduction in
rank or compensation or removal of such person or groups of persons
from said service," provided they are " not affiliated with any outside
organization imposing an obligation or duty upon them to engage in
any strike, or proposing to assist them in any strike, against the
United States." This, according to President Nelson, of the National
Federation, legalizes the right to affiliate with the American Federa-
tion of Labor, because that body does not require any affiliated body
to strike nor does it propose to help any body in a strike against the
United States. Legislation and not strikes is held to be the last
recourse of public employees in settlement of grievances.^ This right
of organization carries with it the further right to petition and agi-
tate for remedial legislation, which had been denied to some extent by
the federal officials. The contention of the union officials is that
bad conditions brought about the organization of the union and that
their aim was amelioration by peaceful methods, and so they are
opposed to strikes. "As a matter of fact," said President Nelson to
a Congressional committee, "in the Chicago post office before our
union came into existence we practically had strikes. The men after
working fourteen hours on a stretch refused to work any more ; they
walked out and deliberately rang the Bundy clock and went home, —
seventy-five of them, — and they could not get men to take their
places."* In reality, these organizations, whether affiliated or not
with the American Federation of Labor, are in many respects trade-
unions and are recapitulating — the earlier stages at least — the devel-
opment of many regular trade-unions. It should be borne in mind,
also, that the government postal employees in France went out on
^Constitution, 1910, Article II.
^Proceedings, 1911, p. 37; The Union Postal Clerk, January, 1912, p. 14.
^The Union Postal Clerk, August, 1912, p. i.
*Ibid. December, 1911, p. 8.
352 TRADE UNIONISM AND LABOR PROBLEMS
strike in 1909, and the railroad employees, composed partly of gov-
ernment and partly of private lines, in 19 10, and that this latter
strike was broken only by calling the men to the colors.
II. MEN HOLDING FEDERAL LICENSES
Here are found such organizations as the National Marine En-
gineers' Beneficial Association and the American Association of
Masters, Mates, and Pilots. Their members are required to have a
federal license to engage in their calling and are subject to govern-
ment inspection. The conduct of all such licensed officers is subject
to investigation by the Local Board of Inspectors, which has power
to suspend or revoke licenses. Section 4449 of the Revised Statutes
of the United States reads:
If any licensed officer shall, to the hindrance of commerce, wrong-
fully or unreasonably refuse to serve in his official capacity on any
steamer as authorized by the terms of his certificate of license, or
shall fail to deliver to the applicant for such service at the time of
such refusal, if the same shall be demanded, a statement in writing
assigning good and sufficient reasons therefor, or if any pilot or
engineer shall refuse to admit into the pilot house or engine room any
person whom the master or owner of the vessel may desire to place
there for the purpose of learning the profession, his license shall be
revoked upon the same proceedings as are provided in other cases of
revocation of such licenses.
This law is said by some to deny the right of striking and to put
these organizations into the list of nonstriking ones. President
William F. Yates, of the National Marine Engineers' Beneficial
Association, however, speaking concerning the right of federal control,
says in an official letter that " no officer of the inspection service has
any right to inquire as to why a man refuses to accept employment,
and if he (officer) asks such questions he should be told emphatically
that it is none of his business."^ Then he goes on to say that the
language of the section just quoted "has been taken by some members
of the inspection service, owners, attorneys, and others to mean that
a licensed officer may be compelled to enter the employment of any-
one who needs his services, and this meaning or interpretation is
absurd in the opinion of good lawyers, and I'd like to see thp man
1 Proceedings, 1910, p. 297.
TRADfi-UNlON DEVELOPMENT 353
who could press me in his service against my inclination in the
matter." The contention is that a marine engineer or other licensed
officer has no "official capacity" on any vessel except he be in the
employ of the owners or agents, and the plain intent of the law is to
prevent a licensed officer who is regularly employed on a vessel from
wrongfully or willfully refusing to do his duty in either refusing to
remain on a vessel when required or quitting on eve of departure.
"Any other construction attempted," says President Yates, "should
be fought to the bitter end."
This association was in fact, if not in name, a trade-union, because
its rules provided that no subordinate association could either go on
strike or change its scale of wages without the knowledge and consent
of the National President and Advisory Board.^ Likewise most of
the troubles or strikes of this organization have been in connection
with the making of a scale of wages.^ Although emphasizing collective
bargaining, the Marine Engineers asserted in 19 10 that they did
not affiliate with other labor organizations because "if engineers live
up to the part of licensed officers they need no such alliance and that
such would be harmful to both."^ There were, therefore, no sym-
pathetic strikes in their organization. Even as to strikes, the rule
had been enacted that the word "strike" must be eliminated from
the records of each subordinate association.* The feeling, how-
ever, continued to grow that the interests of the Association and
its members were being discriminated against on account of their
isolated labor position and that they were failing to gain the benefits
and rights accruing to other organizations through combined effort,
and so the matter of affiliating with the American Federation of Labor
became urgent.^ At the convention of 1916, after considerable dis-
cussion and questioning a representative of the Federation as to obli-
gations involved, it was voted to take a referendum vote of the entire
membership on the matter of affiliation.® The result was 2933 for
and 1236 against affiliation. On account, however, of jurisdictional
differences with the steam engineers, the machinists, and other unions
as to who should do certain work or make repairs, the acceptance
of the charter was held in abeyance until the convention of the
1 Constitution, 1907, p. 27. * Constitution, 1907, p. 27.
2 Proceedings, i9ii,p. 485. = Proceedings, 1916, p. 22.
^Id. 1910, p. 143. ^Ibid. pp. 44, 57.
3 54 TRADE UNIONISM AND LABOR PROBLEMS
Association in 1917.^ It is interesting to note that a resolution for the
creation of a defense fund was rejected because of " the opinion that
the fact that a defense fund was in existence would cause our mem-
bers to become careless and aggressive."^ Opposition to the Marine
Engineers' coming into the Federation continued, and at the con-
vention of 19 1 7 the National Executive Committee was authorized to
continue negotiations with the view of securing an acceptable charter.
During 19 17 negotiations continued, and finally a conference with
the protesting international unions was arranged to be held during
the Buffalo convention of the American Federation of Labor. The
conference was held Monday evening, November 19, 1917, between
representatives of the Marine Engineers and of the protesting organ-
izations involved, namely, the International Association of Machin-
ists, Brotherhood of Boilermakers and Iron Ship Builders, United
Association of Plumbers and Steamfitters, and International Brother-
hood of Electrical Workers. After considerable discussion an ami-
cable adjustment concerning the division of work was reached, and
the protesting unions withdrew their objections. The charter was
issued on December 14, 1917, and so, as a result of a movement
begun in 1903, the Marine Engineers became affiliated with the
American Federation of Labor.*
The American Association of Masters, Mates, and Pilots is like-
wise composed of licensed officers, and its development may be
brought out briefly. Although for many years a trade-union in every-
thing but name, it did not become affiliated with the American Fed-
eration of Labor until 19 16, and then only after much agitation and
discussion and the defeat of a similar movement in 191 1.* The
officials of the Association denied for some years that it was a trade-
union. In spite of the idea that a licensed officer was in a special
class by himself, the feeling grew that "the best interests of this Asso-
ciation require that it be affiliated with the American Federation of
Labor in order that its objects and purposes be more fully and com-
pletely attained." Such a resolution was passed at the 19 16 conven-
tion and subsequently sustained by a referendum vote of the entire
1 Minutes of the Executive Committee, July, 1916, p. 26.
2 Proceedings, igi6, p. 52.
^Id. 1912, pp. 225-238; 1917, pp. 401-406; 1918, pp. 308-337.
^Master, Mate, and Pilot, March, 1911, p. 486.
TRADE-UNION DEVELOPMENT 355
membership.^ On account of this action a dual organization, em-
bracing the higher officers in ship service and known as the Ship-
master's Association, has been formed by some seceding members, —
an evident exaniple of persistent individualism.
III. RAILROAD EMPLOYEES
This group is made up of the train-service organizations whose
members are employed on the railroads. These are the Brother-
hood of Locomotive Engineers, the Brotherhood of Locomotive
Firemen and Enginemen, the Brotherhood of Railroad Trainmen,
and the Order of Railway Conductors of America. All have had a
common origin and a similar development, as will be brought out.
The Brotherhood of Locomotive Engineers is the oldest organ-
ization in this group. It was organized as the Brotherhood of the
Footboard in 1863 and reorganized the next year under the present
title. During the first ten years the Brotherhood developed fraternal
and beneficiary features and had a few local strikes, although these
were discouraged by the officials. In 1874 the president was deposed
as being too much of a pacifist and was succeeded by P. M. Arthur,
who continued at the head of the organization until his death in 1903.
While conservative in his policy, Mr. Arthur declared: "We are
opposed to strikes and will not resort to them unless forced to do so
by the arbitrary actions of our employers. It is our only hope when
moral suasion fails." ^ Wage agreements and arbitration rather than
strikes were emphasized. Strikes were necessary at times, because
some railroad officials were imbued with the ideas of absolute mon-
archy. An engineer, for instance, was discharged and went to the
superintendent and asked, "Will you be kind enough to tell me
what I am discharged for? " and received the answer : " You are dis-
charged, are you? Well, that is conclusive evidence that the com-
pany doesn't want you.'"* A campaign of education and the use of
the strike when necessary brought about better relations. The great
strike on the Burlington Railroad in 1888 is said to have been caused
by "a narrow view of master and servant all along the line. They
were the masters and the road was their kingdom to manage, and no
1 Proceedings, 1916, pp. 73-74.
^Locomotive Engineers' Monthly Journal, December, 1876, p. ii.
^Ibid. May, 1905, p. 393.
3S6 TRADE UNIONISM AND LABOR PROBLEMS
interference or arbitration could be allowed."^ The result of this
most bitter and prolonged strike in its history revealed the strength
of the Brotherhood and made it easier to get along with the railroad
companies by peaceful means.
The Brotherhood of Locomotive Firemen and the Brotherhood of
Railroad Trainmen have had much the same development, as will be
indicated briefly. The Brotherhood of Locomotive Firemen was
organized in 1873 as a mutual benefit association and did not become
a distinct labor organization until 1885, when a protective policy was
adopted, much against the wishes of its officers.^ Likewise, the
Brotherhood of Railroad Trainmen, organized at Oneonta, New York,
in 1883 as the Brotherhood of Railroad Brakemen and changing its
name in 1889, has had much the same development as the other
brotherhoods.^
The most pronounced and dramatic development in this group
is that of the Order of Railway Conductors of America, organized
in 1868 and continuing as a purely fraternal organization until 1891.
The Conductors stood on the policy adopted at the convention at
Elmira in 1877: "Temperance and totalopposition to unlawful and
violent uprisings of employees, termed 'strikes.'" At the same time a
resolution was passed unanimously that any brother engaging in a
strike should be expelled, and that a notice of the same with the
cause therefor should be sent to all railroad superintendents within
reach of the division secretary. Another resolution at the same con-
vention provided that " the names of all members expelled for drunk-
enness or engaging in a strike shall be published in the magazine."*
The year 1877 was marked by violent railroad strikes, and the
resolutions quoted probably were caused by a reaction from the same.
Still, in 1882, Grand Chief Conductor G. S. Wheaton declared that
the weaker party succumbs in every strike and that there are no gains
through strikes and coercion, and in the convention of the same year
the platform adopted ran : " Reserving the right to prosecute our own
business according to the dictates of our own conscience, and within
the law, according to every other man the same right." ^ The next year,
^Locomotive Engineers' Monthly Journal, October, 1896, p. 880.
^Locomotive Firemen's Magazine, June, 1910, p. 843.
3 History by D. L. Cease, p. 5.
♦Proceedings, 1885, p. 739. s/d. 1882, p. 507.
TRADE-UNION DEVELOPMENT 357
1883, a circular was issued stating that the Order was uncompro-
misingly opposed to strikes or coercive measures.^ At the Louisville,
Kentucky, Convention, in 1885, a resolution was passed and embodied
in the Constitution providing that in order to obtain recognition in
the matter of obtaining favors and adjusting grievances the division
or divisions interested should select a member or members as a com-
mittee to wait upon the general officers of the railroad company, and,
if refused, to ask the Grand Chief Conductor of the Order to call
on the officers and endeavor to effect a settlement. It was made
obligatory on the Grand Chief Conductor to comply with such a
request in every case, and the expenses attending same were to be
borne either by the division or the individual making the request.^
This marked a change of the Order from a mutual fraternal society
to a labor organization, and it was so designated by Grand Chief
Conductor Wheaton at the New Orleans Convention in 1887. The
movement for making the Order a factor in the adjustment of
grievances marked by this opening wedge continued, and the culmina-
tion came in the removal of the law against strikes and the election
of E. E. Clark, who represented the progressive element, as Grand
Chief Conductor at the convention at Rochester, New York, in 1890.^
A good deal of the subsequent growth of the Order was due to
the wise and energetic policy of Mr. Clark, who served until 1906,
when he resigned to accept an appointment on the Interstate Com-
merce Commission.* Just before the removal of the no-strike law a
demand for an increase of wages on the New Albany Railroad was
met by its superintendent in refusing with the words, "You cannot
strike"; but the conductors replied, "We can quit," and the result
was that they received the increase demanded.^ A strike in 1890
and another one in 1891 showed the necessity of some definite strike
rules, which later were enacted at the 1891 convention modeled to a
large extent on those of the Locomotive Firemen.** These rules re-
main substantially the same to this day, and other actions of the
convention placed the Conductors on the basis of a labor organization.
These four train-service brotherhoods, beginning as fraternal and
beneficiary orders merely, have thus become under prevailing
1 Proceedings, 1883, p. S9S- ^J^- i9°7> P- 46.
27d. 188S, p. 787. ^Id. 1890, p. no.
s/d. 1890, pp. 136, 276. ^Id. 1891, pp. 43-49, 341-347.
3S8 TRADE UNIONISM AND LABOR PROBLEMS
industrial conditions regular trade-unions — business unions pure and
simple — which, on account of their strategic position in the railroad
industry and consequent advantage in bargaining power, have found it
unnecessary to affiliate with other unions, except that at times they
have taken in the Order of Railroad Telegraphers in a wage demand.
On account of their independent position they are sometimes called
the aristocrats of the trade-union world, and their strength may be
seen in the passage of the Adamson Act in 191 6 by Congress, grant-
ing the eight-hour day and extra pay for overtime in order to avert a
concerted strike on their part throughout the United States.
IV. MISCELLANEOUS
In this fourth group is found a number of organizations at various
stages of development recapitulating the experiences of the organi-
zations in the preceding groups. In this group tendencies are not
so clear, and some of the movements are not fully developed as yet.
One type of organization is that made up of state, county, and city
employees, and thus including to some extent men of special training
and education. These include such-unions as the Bridge Tenders'
Union, City Firemen's Union, Cilj*Highway Employees, Health Offi-
cers' Association, Housing Inspectors, Municipal Employees, School
etStddians and Janitors, Sidewalk' Inspectors': Association, State
Hospital Employees, and the National Federation of State, County,
and City Employees. These are, for the most part, local unions
affiliated directly and not through an international union with the
American Federation of Labor. A movement for the unionization of
policemen has been proposed recently in Boston. Police Commis-
sioner O'Meara voiced his strong opposition to the movement in
that while a union of some public employees might be a matter of
doubtful propriety, one of policemen would mean an abandonment
of an impartial attitude on account of affiliation with an outside
organization and so not to be allowed.^ However that may be, the
recent strike of the London police is of interest. The New Statesman
of September 7, 19 18, states the issue thus:
We regret that the police were compelled to strike, but we
heartily congratulate them upon their victory. Their grievances were
manifold, and if, after years of "victimization," stern refusal, and
^Boston Evening Transcript, June 29, 1918, p. 2.
TRADE-UNION DEVELOPMENT 359
procrastination, they decided that nothing but a strike could bring the
authorities to reason, they had plenty of grounds for their belief. A
very brief, and on the whole very orderly and good-tempered, demon-
stration was all that was necessary. It was too late to try to hit at
the Union once more by wholesale dismissals; the public and the
newspapers (though shocked) were uniformly sympathetic with the
strikers; Mr. Lloyd George was staggered to find, quite suddenly,
that a force he belieyed to live in paradisal content was thoroughly
discontented ; and the Government made a swift climb-down. Before
the strike the minimum wage was 30 s., with a war bonus of 12 ^. and
a 2s. 6d. allowance for children; the total has now been increased
by 135. There is also to be a noncontributory pension for widows.
Recognition has not been accorded in terms, but the Union Executives
were met by Mr. George as the men's representatives, and ex-P. C.
Thiel, provisional organizer of the Union and delegate to the London
Trades Council, is to be restored to the post from which he had been
dismissed for taking part in "an unauthorized association." This
means that if "recognition" has not been given in words, it has been
given in all save words.
Librarians, school teachers, and college professors have generally
regarded themselves as professional men and women. The Library
Employees Union has, however, been organized in New York City.
A similar movement in Boston has been criticized on the ground that
"it has from time immemorial been the rule among professional men
and women that an organization of themselves to advance wages is
unprofessional and undignified."^ The most advanced movement in
this group is found in the American Federation of Teachers, organ-
ized April IS, 1916, and affiliated with the American Federation of
Labor, which, on November 18, 19 18, included thirty- three local
unions stretching from the Atlantic to the Pacific, with one in the
Canal Zone. A local union of more than three hundred women teach-
ers was organized at St. Paul in June, 1918, during the convention
of the American Federation of Labor. Another local union has just
been formed by the faculty of Howard University, Washington, D. C,
the first among the colleges. The ideal of the movement, is "democ-
racy in education ; education for democracy." Evidently there seems
to be a reason for this movement, for as one teacher said to the writer,
"We have tried literary clubs, social organizations, and teachers' asso-
ciations and they have not gotten us anywhere, and now we are going
^Boston Evening Transcript, May 22, 1918.
36o TRADE UNIONISM AND LABOR PROBLEMS
to try a trade-union." An example of results , obtained is shown in
the Chicago school situation, where a school board has been legislated
out of office and a new one substituted largely by the help of organ-
ized labor and other liberal elements. A statutory guarantee of ten-
ure during efficiency has also been obtained. The old board had
passed a rule forbidding membership of teachers in organizations
affiliated with labor, or any other organizations that might be specified
at any time in the future at its caprice. It had also passed a rule
abolishing tenure based on meritorious service and had dropped sixty-
eight teachers. In such a case as this it is necessary for teachers to
combine and affiliate themselves with other organizations and not
stand weak and alone. The discharged teachers who belonged to the
Federation were all reinstated and have continued their local organiza-
tion (Chicago Teachers' Federation) without reaffiliation with or-
ganized labor, from which they withdrew for the time being as a
matter of policy. The alliance of teachers with trade-unionism is
a sign of present economic conditions and should arouse considerable
interest. The American Federation of Teachers, however, is not a
mere bread-and-butter movement, as is shown by its program of
educational and social reforms.^
In conclusion it may be said that the economic conditions of the
present day are such that organizations beginning as fraternal and
beneficiary ones become under economic pressure trade-unions. The
younger organizations seem but to recapitulate in their growth the
development of the older ones. Among the larger organizations
studied the exception seems to be the National Association of
Stationary Engineers, but even in this organization there has been
some agitation for trade-union policy and affiliation.
The question naturally arises: What has become of the spirit
of individualism which has always been such a prominent factor in
American life ? A partial answer is, of course, that a large number
of American workmen are not connected with the trade-union move-
ment, although that number is becoming less. But the fact remains
that if workmen are organized at all the tendency is to become identi-
fied with the trade-union movement. The notion that because a man
is a government employee, or a licensed officer, or a more or less
^American Teacher, September, 1918, pp. 139, 151. Letter of President
Charles B. Stillman.
TRADE-UNION DEVELOPMENT 361
skilled workman, or considers himself a professional man, he can
stand alone under present conditions of industrial and social organi-
zation, has been weighed in the balance and found wanting. The
sentiment "I'm a licensed officer and not a trade-unionist" may swell
a man's pride, but it does not go far in getting help for the passage
through Congress of a law to better his working conditions. The
dissenting votes in the various organizations examined show that the
individualistic feeling is not dead, but the majority votes in favor of
affiliation with organized labor indicate a recognition of facts and
show the trend of events. Whether he will or no, the workman of
today is being forced to organize along trade-union lines and is fast
developing a strong class consciousness.
George Milton Janes
"Pennsylvania State College
XXVI
AMALGAMATION OF RELATED TRADES IN
AMERICAN UNIONS^
WHILE the radical industrial unionists, who favor combining
all crafts, skilled and unskilled, in an industry, have been
engaged in controversy with the conservative trade autonomists who
oppose this policy, a gradual evolution has been taking place in
consequence of which craft unions are disappearing. Of 133 national
unions, most of them affiliated with the American Federation of
Labor, only 28 may be called craft unions, if by a craft we mean work
requiring identical skill and training. Nor do these figures tell the
whole story, since about one half of the 28 craft unions are cooperat-
ing through loose alliances with other related trades in the same
industry. Yet the disappearance of the craft union does not neces-
sarily prove the ultimate victory of the industrial union. Only
5 of the national unions claim jurisdiction over all trades in an
industry. The remaining 100 are of an intermediate type. They
unite only part of the trades in an industry. We shall call them
amalgamations of related trades.
The history of American unionism reveals, indeed, an occasional
tendency towards disintegration of related trades. Between i88g
and • 1902 the printing-pressmen, the bookbinders, the photo-
engravers, and the stereotypers and electrotypers seceded, one after
another, from the International Typographical Union and formed
separate organizations. More recently v the window-glass cutters
and flatteners have broken away from the Window-Glass Workers'
Union. But such instances of disintegration have been comparatively
rare. Moreover, crafts which were once united and later became
disunited, as, for example, in the boot and shoe industry, have some-
times been brought together again. Much more frequent has been
the amalgamation of related trades by the combination of existing
iFrom American Economic Review, Vol. V (igis), pp. SS4-S7S-,
362
RELATED TRADES IN AMERICAN UNIONS 363
unions, by the extension of the jurisdiction of a craft union to include
unorganized crafts, or simply by the retention of membership in
the original organization as the craft has split by division of labor
into several crafts.
The amalgamation of related trades has been taking place in the
United States almost ever since national unions began to appear.
The machinists and blacksmiths, who were united in the same
union as early as 1859, managed also to bring the boiler-makers into
their organization before it went to pieces in 1877. The Sons of Vul-
can, composed of iron-boilers and puddlers, united in 1876 with the
National Union of Iron and Steel Roll Hands and the Associated
Brotherhood of Iron and Steel Heaters, Rollers, and Roughers of
the United States.
The number of such amalgamations has increased greatly since
1894. As division of labor has become more minute, trade barriers
have become less rigid, and differences of skill have been lessened.
Hence the newly created crafts — if we can still so call them — have
not only held together but have also affiliated themselves with other
crafts in the same industry. Integration of industry has been
another factor. Workers engaged in different parts of the industrial
process have been brought together under a common management
and have combined in order to cooperate for collective bargaining.
Between 1894 and 1904 the various unions of boot and shoe workers
coalesced, as did also those of the hatters and of the textile workers ;
the union of furniture workers combined with that of the machine
woodworkers ; the Iron Molders' Union absorbed the coremakers ;
and the union of coal-hoisting engineers was merged into the
United Mine Workers. The period witnessed the rise of the Amal-
gamated Meat Cutters and Butcher Workmen with its minutely
subdivided groups of workers, skilled and unskilled, in the meat-
packing houses. During this decade, also, the United Brewery
Workmen, the United Mine Workers, and the Western Federation
of Miners embarked on their policy of industrial unionism and
attempted to bring into their organizations all kinds of workers in
the industry.
During the ten years since 1904 the movement towards amalga-
mation of related trades has been accelerated by the rise of the
Industrial Workers of the World. Both of the labor federations
364 TRADE UNIONISM AND LABOR PROBLEMS
which bear this title ^ require that each national union affiliated with
it shall embrace all workers in an industry. The growth of these
two labor federations has undoubtedly stimulated the American
Federation of Labor to pursue a more liberal attitude towards
trade amalgamation and industrial unionism. The attitude of the
dominant faction in the American Federation of Labor has, indeed,
sometimes been misstated. The term "trade autonomists," which is
applied to them, is also misleading. They oppose industrial union-
ism. But not even the most conservative of the older labor leaders
who cling to the traditions and methods of the past would desire to
rip apart the existing amalgamations of trades nor to forbid all fusion
of craft unions in the future. They favor the amalgamation of
closely related trades, but are inclined to broaden very slowly
their interpretation of the words " closely related." They have been
especially reluctant to encourage the absorption of unskilled
workers by an organization of the skilled, or to sanction the dis-
tribution of a craft employed in several industries among a corre-
sponding number of industrial unions.
In times past the American Federation of Labor has been opposed
to certain alliances of related trades, notably the International
Building Trades Council. It opposed the latter organization, not
because it objected to such cooperation between related trades, but
because the International Building Trades Council refused to affil-
iate with it and yet was settling jurisdictional disputes in the building
trades, maintaining sympathetic strikes, and fulfilling other functions
which were being performed, in part at least, by the American Fed-
eration of Labor. The president of the American Federation of Labor
made a sweeping assertion at the convention in 1901 regarding this
conflict of function. "There is nothing," he said, "for which the
International Building Trades Council can decla:re which has not
been more effectually exercised and more clearly achieved by the
American Federation of Labor." Such a statement is an exaggeration,
since the group of related trades has interests in common which a
general labor federation will not promote. Nevertheless, the allegiance
iQne of the associations known as the Industrial Workers of the World has
headquarters in Chicago and the other has headquarters in Detroit. The latter
broke away from the parent organization in 1908 to form a rival federation
bearing the same name.
RELATED TRADES IN AMERICAN UNIONS 365
of some of the national unions of the building trades was very prob-
ably weakened by their greater interest in the independent federation
of the trades in their own industry. The American Federation of
Labor contented itself at first merely with opposition. A more con-
structive policj' was inaugurated in 1903 when the Metal Trades
Federation, composed of machinists, blacksmiths, patternmakers,
iron-molders, and other metal trades, was made a department of the
American Federation of Labor. Subsequently, a building-trades de-
partment, a mining department, and a department of railway em-
ployees were created. Only the railway shop crafts are at present
united in the railway employees' department, but the ultimate purpose
is to combine all railway employees.
Recently the party in control of the American Federation of
Labor has shown a tendency to pursue a more liberal policy regard-
ing the organization of the unskilled. This is illustrated by the
efforts to form unions of migratory and other unskilled workers and
by the sanction given in 1912 to the plan of the shingle weavers to
include all workers, skilled and unskilled, in the lumber industry.
The majority in the American Federation of Labor are still opposed
to industrial unionism. For some time, however, there has been a
steadily increasing minority desiring industrial unionism, and at
recent conventions of the general labor federation they have main-
tained a strong though unsuccessful fight for the adoption of resolu-
tions favoring that method of organization.
Should the amalgamation of related trades include all or only a
part of the crafts in an industry ? Should the government by which
such related trades are united be a centralized amalgamation practi-
cally identical with that of the national craft unions which it replaces,
or should it be a loose alliance or federation in which the national
craft unions continue to retain their existence? To answer these
questions we must consider, first, the reasons for uniting related
trades ; secondly, the relative advantages and disadvantages of cen-
tralized amalgamations and loose confederations ; and, thirdly, the .
kinds of related trades which have tended to unite.
An important reason for uniting a group of related crafts has been
the need of cooperating to maintain strikes against a common em-
ployer. Strikes are much more effectual if all wage-earners in indus-
trial establishments, including many not affected by the dispute, may
366 TRADE UNIONISM AND LABOR PROBLEMS
be ordered to quit work simultaneously. When the great strike in
the meat-packing houses of Chicago was declared in the summer of
1904, the stationary engineers and stationary firemen, who have
separate organizations from the other employees, remained at work.
Had they quit, the strike would not have failed, say the leaders
of the Amalgamated Meat Cutters and Butcher Workmen. With
a large supply of meat in the refrigerators to satisfy current de-
mands, the packers could view with equanimity the prospect of a
cessation of work for many days. But if the stationary engineers
and the stationary firemen had struck and so closed down the ice
plant in the refrigerating department, they would have had to
make terms within a few hours. The engineers and firemen did
apply to their organizations for consent to strike in sympathy with
the butchers, but some days elapsed before permission could be
obtained. When they did finally strike, the packers, anticipatihg
such a movement, had already secured engineers and firemen to take
their places.
Again, strikes of employees in a single department of a factory
often fail because the employees in other departments can be kept
busy by having the work of the strikers done in some other estab-
lishment. For example, if the compositors in a printing office
declare a strike, but the printing-pressmen remain at work, the pub-
lisher may have his composition done by nonunion workers in some
other office, the forms or stereotyped plates being handled by his
own pressmen. Employers united in opposition to the union fre-
quently put themselves to considerable inconvenience to help one
another in an emergency. It was the desire to put an end to such
practices on the part of employers which led to the amalgamation of
three national unions of iron and steel workers in 1876. When the
iron-boilers and puddlers went on strike, the heaters and rollers were
kept at work by supplying them with muck iron made by nonunionists
in other places. For this reason the great Pittsburgh strike of boilers
and puddlers failed in 1875 ; and, because of its failure, this group
of workers, highly skilled, strongly unionized, and withal much in-
clined to hold aloof "from entangling alliances," was converted to
the plan of amalgamating all trades in the iron and steel mills
into one union .^
^National Labor Tribune, Pittsburgh, January 2, 9, April 10, 1875.
RELATED TRADES IN AMERICAN UNIONS 367
Without cooperation between the related crafts in an industry, '
strikes of a single trade fail because, in order to keep the plant in
operation and thus remain employed, the members of other trades
do the work of the strikers or instruct nonunionists how to do it.
Thus, in times past, locomotive firemen have run engines during
strikes of locomotive engineers; and locomotive engineers, on their
part, have taught strike breakers how to perform the duties of
locomotive firemen. Undoubtedly, unions would be able to bargain
much more effectively for better working conditions if the agree-
ments or contracts of all trades in an establishment expired at the
same time, if the demands of the several trades were presented jointly
to an employer, and if a refusal to comply with these demands
caused every employee in the establishment to quit work.
On the other hand, strikes of a single trade which cannot be readily
replaced are unfair to the other related trades in the industry, since
such a siiigle trade, even though composed of only a handful of
journeymen, can often shut down a large plant and throw out of em-
ployment hundreds of workmen who have no voice in the matter. One
reason why the International Typographical Union wishes to retain
control over thd machinists in the printing office is because a strike
on their part may abruptly halt all activities and throw the other
workers out of employment.
Strikes of a single trade are unfair to the group which wages them
when other workers in the factory who have not helped to win the
strike must share the fruits of victory. If a group whose presence
is necessary for the running of a factory labors only eight hours a
day, the other employees must also suspend work at the end of the
eighth hour. In consequence, when the trades in an industry are
organized into separate unions, one of them may bear the brunt of
a long and severe struggle to secure improvements which will also
benefit the others.
A group of trades which jointly produce a single article benefit
greatly by uniting to boycott "unfair" firms and to extend, by means
of the union label, the sale of goods made in "fair" shops. Attempts
of each trade to maintain independent boycotts cause much con-
fusion. Thus, the printing-pressmen may be urging the pubhc not
to buy the newspaper of a publisher, while the printers, to whom
the same publisher has accorded excellent conditions, may be urging
368 TRADE UNIONISM AND LABOR PROBLEMS
the public to buy it. One reason why the brewery workmen became
enthusiastic advocates of the so-called "industrial union" was be-
cause of the conflict in maintaining boycotts which occurred when
the various trades were organized into separate associations. Simi-
larly, when each trade in an industry has a separate label, conflict is
inevitable. Thus, if one of the trades in a particular factory is
organized and the others are not, the union of the unorganized trade
will object to the efforts of the organized union to extend the sale of
the goods made in that factory by means of the union label. The
various organizations of boot and shoe workers amalgamated in 1895
because of the great need of cooperating to maintain a single label.^
After four trades in the printing industry had split off from the Inter-
national Typographical Union, local alliances of the printing trades
in each community became necessary, primarily to promote harmony
in the use of the union label.
Another reason for amalgamation and federation of related trades
is the movement of workers from one craft or division of a craft to
another. Instances of crafts whose members are recruited from other
trades are numerous. The ranks of the locomotive engineers are
replenished from the locomotive firemen. A railroad brakeman may
become later a railroad conductor. The pressman's assistant rises
to the position of printing-pressman. The cigar-maker of ability learns
enough concerning the varieties of tobacco and the making of the
cigar to do the work of the cigar -packer. Many carpenters and
cabinetmakers enter the craft of patternmaking. In the large meat-
packing houses, in the coal mines, in boot and shoe factories,^ and
in other industries division of labor is lessening the amount of skill
required, and journeymen pass readily from one kind of work to
another. Under such conditions the various groups of workers must
combine to control the supply of the labor in the industry and to
prevent disastrous competition for employment between members of
different unions. The combination of related trades solves also the
difficulty created by the refusal of journeymen who change their
ir^e taster, Lynn, June ij, 1891, p. 2.
2The Boot and Shoe Workers' Union adopted the following in 1904: "Mem-
bers working at one branch of the trade are entitled to change to another
branch, provided the local union having jurisdiction over that branch cannot
fill the position with one of its members" {Shoe Workers' Journal, Boston,
February, 1904, p. 37).
. RELATED TRADES IN AMERICAN UNIONS 369
trade to sever their connection with the union of their former craft
in order not to lose the right to its sick, death, and other benefits.
Thus, many locomotive firemen after becoming locomotive engineers
retain their membership in the union of the locomotive firemen. The
Brotherhood of Locomotive Engineers pays benefits of adequate
amount, but the average age of its members is higher than the average
for the union of locomotive firemen, most of whose members are
young men. Hence the death and disability rate of the Brotherhood
of Locomotive Engineers is larger and the cost of maintaining, its
benefits is greater. Because of this additional cost, young locomotive
firemen who have received their promotion are reluctant to join it.
When railway conductors become too old to perform their responsible
duties efficiently they are often employed by the railroad cornpany
as , switchmen. These men are frequently too old to become bene-
ficiary members of the Switchmen's Union and they insist on retain-
ing their membership in the Order of Railway Conductors. Of course
when part of the members of a trade belong to one organization and
part to another, their ability to bargain effectively with employers
is greatly lessened.
Another advantage of amalgamation and federation of related
trades is that it reduces the number of jurisdictional disputes con-
cerning the right to do certain work. To be sure, trade amalgamation
has caused many jurisdictional disputes as to membership, since
many of the old craft unions have waged a bitter conflict against
the new industrial organizations which have attempted to absorb
them. But such disputes over membership must be distinguished
clearly from disputes over work which arise because of the difficulty
of making clear-cut divisions of labor between the various trades
which cooperate in production. Thus, not only do the masons lay
granite and other kinds of stone but sometimes they also cut them.
The granite-cutters not only cut granite but sometimes they also lay
it. In a small town the same man often combines the trades of brick-
layer, mason, and plasterer, or those of plumber, steam fitter, and gas
fitter. Even in large cities the bricklayer or the plumber may do
the work of related trades when he cannot find employment in his
own. The brewer and the brewery driver must handle cooper's tools
in an emergency, and the cooper in the small establishment does the
work of the brewer when there is not sufficient cooperage to keep
370 TRADE UNIONISM AND LABOR PROBLEMS
him busy. In the small retail store, clerks drive wagons and go out
for orders when occasion demands. On the other hand, many a
driver fills at the store the orders which he has taken during the
morning and then delivers the goods to customers. Such men fre-
quently receive a higher wage than either the driver or the ordinary
clerk. The introduction of machinery, the use of new materials, and
new divisions of labor are upsetting carefully established trade
boundaries and are giving opportunity for a plentiful supply of
jurisdictional disputes. The increasing use of cement has created a
new group of journeymen, the cement workers, who are waging a
war of words with the bricklayers about the right to lay artificial
stone made of cement. Another comparatively new group, the ceramic,
mosaic, and encaustic tile-layers, are engaged in a controversy with
the bricklayers as to which of them shall lay tile. The bricklayers,
the tile-layers, and the cement workers all claim the right to lay
tile made of cement. Instances might be multiplied.
When two related trades are organized into separate unions each
demands a careful demarcation of its work and a strict observance
of the boundaries thus set. Such a rigid division causes great in-
convenience both to employer and employee and in many instances
is impracticable. If after long negotiation a satisfactory dividing
line is fixed, the adoption of new methods of production is apt soon
to upset the arrangement. The result is an endless controversy with
all the disastrous consequences which follow in the trail of such
internal conflicts.
On the other hand, if both trades are united in the same union,
one of them may often do the work of the other without causing a
serious dispute. If a dispute does arise, it can be effectively settled
when referred to a common organization whose decision is final for
both parties. In England, where the stonemasons and the granite-
cutters are federated in the same union, there exists no controversy
between them as in the United States, where they are divided into
separate organizations. To be sure, disputes do exist between Amer-
ican bricklayers and masons who are united in the Bricklayers' and
Masons' International Union, but in places where such disputes have
arisen harmony has usually been restored by the committee on gen-
eral good, which federates all local societies of the two trades through-
out the community. If this committee cannot settle the controversy
RELATED TRADES IN AMERICAN UNIONS 371
it is referred to the international union, " which administers justice,"
says an official of the society, "and prevents another Cain and Abel
episode." Jurisdictional disputes have been serious blots in the his-
tory of many American trade-unions, and an important argument in
favor of trade amalgamations is the possibility that they will prevent
one large class of such disputes.
An objection to trade amalgamations is that while related crafts
have many interests in common, they have other interests which may
diverge widely or may directly conflict. The difficulty of harmoniz-
ing these diverging or conflicting interests is increased when one trade
outnumbers all the others added together, since the group having the
majority is apt to use the amalgamation to further its own concerns
at the expense of the others.. Thus, in the United, Association of
Journeymen Plumbers, Gas Fitters, Steam Fitters, and Steam Fitters'
Helpers, the gas fitters and steam fitters, who are outnumbered by
the plumbers, complain that often they are not given opportunity
at local and national meetings to discuss matters affecting their own
trades and that when given an opportunity they are outvoted by the
plumbers. They declare that most of the funds are expended in
behalf of the plumbers, and that most of the legislation adopted is
favorable to that trade. The stonemasons make a similar complaint
against the bricklayers. The printing-pressmen and members of other
trades in the printing industry affirm that they seceded from the
International Typographical Union because the compositors, who
preponderated greatly in numbers,, gave too little attention to the
interests of the other crafts.
This weakness of the trade amalgamation has arisen largely from
the failure to provide in its form of government for the fact that
it is a federation of distinct groups. The transition from craft unions
to trade amalgamations has frequently been so gradual that work-
ingmen have not been acutely conscious of the need for changing
the structure of their organizations. Usually the constitution of the
old craft union has been taken over bodily, often without amendment,
by the new amalgamation. In most organizations the national offi-
cers have, sooner or later, been given authority to organize each
trade or division of a trade in a community into a separate local
union whenever conditions warrant; but desiring to secure the
economies of the large local union, they have been slow to exercise
372 TRADE UNIONISM AND LABOR PROBLEMS
this discretionary power. Frequently, also, each trade is given care-
fully weighted representation on executive boards, conference boards,
and other governmental bodies. Undoubtedly harmony between the
related trades may be greatly promoted by such provisions, but,
when identity of interest is slight and divergence or conflict of
interest is great, some loose form of federation or alliance may
be desirable.
Temporary alliances and loose federations of unions of related
trades are by no means uncommon. Indeed, there are to be found
all degrees of centralization, from temporary cooperation for sonie
specific purpose to complete amalgamation. Temporary cooperation
usually takes the form of a sympathetic strike. Very probably there
is no agreement to help one another. Simply, the union of one trade,
on becoming involved in a dispute with employers, calls for aid
from other workers in the industry, and the latter respond by agree-
ing to engage in the conflict. A more advanced stage in cooperation
is reached when there is a definite permanent agreement to help one
another. An example of such an agreement is that between the wall-
paper machine printers and color-mixers and the print-cutters who
make wall-paper prints. By the terms of this agreement the printers
and color-mixers promise not to use prints made by nonunion print-
cutters, and the print-cutters promise not to work for jobbers supply-
ing wall-paper manufacturers whom the printers and color-mixers
have declared to be unfair.
Such promises of two organizations to aid one another are un-
satisfactory, however, if governmental machinery is not established
for the purpose of making joint decisions and taking joint action
concerning matters affected by the terms of the agreement ; and this
is particularly the case if the agreement provides for cooperation
by means of sympathetic strikes. In the first place, unless there is
a joint tribunal to decide as to the expediency of engaging in the
conflict by one of the affiliated crafts, sympathetic strikes are usually
ineffective. When the union of one trade notifies the other only after
the struggle has begun, there is often a long delay while the request
to strike in sympathy is being considered by the national officers or
perhaps by each local society of the related craft. Frequently, indeed,
a strike of one union is practically lost or won before the members
of another union decide to quit work.
RELATED TRADES IN AMERICAN UNIONS 373
A second result of the lack of cooperation during the preliminary
stages of a dispute is that it deprives one union of the opportunity
to prevent inexpedient or unwise strikes desired by another. When
the strike has already begun, and when the refusal to help means its
failure, a strong sense of obligation may force the members of a
related trade to engage in the struggle against their will.
A third objection is that unless the related trades bargain jointly
with employers and make joint agreements, the policy of waging
sympathetic strikes increases the number involved in each conflict
without reducing the number of such conflicts. For example, the
• carpenters engaged in the construction of a building declare a strike
for higher wages, and the members of every other trade on the
building quit work in sympathy. When this trouble has been ad-
justed, the plumbers discover that the employer has violated his
agreement with them, and all trades again go on strike. Next, the
elevator constructors and the hoisting engineers quarrel as to which
of them shall run the completed elevator. The other trades take
sides, and all building operations are suspended until the dispute
can be settled. Then the business agent of the plasterers' union finds
that his trade has a grievance and orders everyone to leave the
building. This is not a very exaggerated picture of conditions in
the building industry as they existed in Chicago just before 1900
or in New York during the spring and summer of 1902. Building
operations were seriously demoralized. The time for the ultimate
completion of a building was a matter of gamble, with all odds in
favor of delay. Building contractors, landlords, and the general
public joined in a chorus of protest against the arbitrary methods
of the unions.
A fourth result is to place the unions in the position of breaking
their contracts. Perhaps an employer has granted favorable terms
to a union, which agrees on its part to maintain industrial peace for
one or more years. Then this union becomes involved in a sympa-
thetic strike to help another trade and violates its agreement. To
aggravate the offense in the eyes of the public and the employer, the
members of the union meddle in a dispute which is apparently none
of their concern.
Cooperation between unions of related trades reaches a much
higher stage of efficiency when governmental machinery is provided
374 TRADE UNIONISM AND LABOR PROBLEMS
to carry out the terms of the agreement. Sometimes the existing
officials of the contracting unions are utilized for this purpose, as,
for example, in the "tripartite agreement" for the regulation of
sympathetic strikes by the unions of printers, pressmen, and book-
binders in 1896. By the terms of this agreement the presidents of
the three international unions visited in person the place where a
joint strike was demanded or sent a representative to effect a settle-
ment if possible. When the dispute could not be amicably settled,
each president referred the matter to the executive board of his own
association. The three executive boards were equal in size, and a
majority of the three taken together could declare a joint strike:
Sometimes special governmental machinery is created to carry out
the terms of the agreement between two or more unions. Thus the
wall-paper machine printers and color-mixers and the print-cutters
have created a joint national committee to control joint strikes and
joint agreements in every establishment where the wall-paper manu-
facturer makes his own prints ; in other words, where the two trades
have a common employer.
Even greater unity between the related trades is attained when a
permanent federal government is created not to perform some par-
ticular function specifically provided for in the written agreement
but to perform any function which the unions represented in the
federation may jointly decide, from time to time, to be desirable.
Federations of related trades are either local, national, or interna-
tional, the so-called international unions having branches in Canada.
Local federations were formed before national or international ones.
Thus, while the International Building Trades Council was created
only in 1897, local federations of building trades existed as early as
1882 or 1883 in New York, Chicago, Baltimore, Cincinnati, and other
large cities.'^ Movement of workers from one city to another, com-
petition between employers in different places, and other causes which
brought about the combination of local into national craft unions
have likewise operated to superimpose national upon local federations
of related trades.
National federations of related trades have been either combinations
of national craft unions or combinations of both local allied-trades
councils and national craft unions. In the second instance either of
^The Carpenter, New York, May, 1882, June and August, 1883.
RELATED TRADES IN AMERICAN UNIONS 375
the two kinds of constituent bodies may predominate, according to the
method of representation at the convention of the national federation.
Thus, at conventions of the International Building Trades Council
the local councils of allied trades outvoted the national trade-unions
until 1905, because each one of the two kinds of organizations was
allowed the same vote. On the other hand, at conventions of the
National Metal Trades Federation the national craft unions, whose
voting power varied according to membership, preponderated over
the local councils of related trades, each of which had only one vote.
The national trade-unions claim that when outvoted in federations
of related trades their power over subordinate societies is greatly
weakened. Prominent officials of the carpenters, bricklayers, granite-
cutters, plumbers, and other building trades opposed the Interna-
tional Building Trades Council for this reason. Not all of the
national trade-unions in the building industry were affiliated at the
time with the International Building Trades Council, but the local
allied-trades councils would still have predominated even if all of
them had been represented. The national craft unions in the building
industry have always been decentralized, and the ability of their cen-
tral governments to control subordinate societies was still further
lessened when these subordinate branches relied no longer on the
central government for financial and moral support in time of strikes,
but secured whatever aid they needed from local and national building-
trades councils. To check this tendency towards decentralization,
those opposed to the International Building Trades Council or-
ganized in 1904 the Structural Building Trades Alliance, composed
only of national trade-unions. Local allied-trades councils were not
permitted representation at its conventions. In 1905, too late to
prevent the successful launching of the rival federation, the Inter-
national Building Trades Council modified its policy by granting to
the national craft unions a voting power proportionate to member-
ship, while continuing to allow each local allied-trades council only
one vote. At present the federation of related trades dominated by
local allied-trades councils is discredited. Such local councils may
be given representation at the federal convention, but the national
craft unions retain the controlling vote.
The amalgamation is the most centralized form of combination
between related crafts; but, like the national trade-union, it is a
376 TRADE UNIONISM AND LABOR PROBLEMS
federation of local craft organizations, and, as already pointed out,
its machinery of government is in most respects the same as that
of the national trade-union.
The degree of centralization desirable for combinations of related
trades depends on the number of interests which they have in com-
mon and the number which conflict. The administration of their
common interests grows more efficient as they become more central-
ized ; but the opportunity for friction regarding matters of conflicting
interest increases also. Thus the government of the amalgamation
is more efficient than the federation of local allied-trades councils or
of national craft unions. It has direct control over the local craft
unions and thus can compel more prompt and faithful compliance
with its commands than can the federation, which must issue orders
through intermediate organizations. On the other hand, friction is
more likely to arise, because matters concerning one craft alone are
not left to the organization of that particular craft but are considered
by a joint convention or joint executive board on which all the related
crafts are represented.
Before determining the kinds of related trades which should be
federated or amalgamated, let us first consider the kinds which are
at present actually united. Amalgamations and federations of re-
lated trades may be divided broadly into ( i ) those combining trades
working for the same employers and (2) those combining trades work-
ing usually for different employers. Illustrations of the first are the
union of employees in carriage and wagon factories, the union of em-
ployees in cigar factories, and the many other trade amalgamations
whose members work together in the same industrial establishments.
An example of the second would be an organization uniting the
makers of handsaws with the carpenters who use them. These two
trades never have the same employers, yet the possibility of combining
them has been considered.
I. Combinations of trades working for the same employers may be
subdivided as follows :
a. Industrial unions claiming jurisdiction over every group of
workers in an industry, including the unskilled and certain well-
defined auxiliary trades, such as the stationary engineers, the sta-
tionary firemen, and the teamsters, who are found in many other
industries. The number of industrial unions is small. A few have
RELATED TRADES IN AMERICAN UNIONS 377
recently been formed as departments of the Industrial Workers of
the World. The most important of the older ones are the United
Brewery Workmen, the Western Federation of Miners, the United
Mine Workers, and the Quarry Workers' International Union.
b. Unions which include only part of the related trades in an
industry. To this group belong most of the American unions.
Auxiliary crafts found in other industries are admitted by a few of
these organizations. Thus, the International Typographical Union,
which embraces compositors, proofreaders, and mailers, is engaged
in controversy with the International Association of Machinists
concerning jurisdiction over the linotype machinists. The theatrical
stage employees dispute the claim of the union of carpenters and
joiners to control the stage carpenters and the claim of the Brother-
hood of Electrical Workers to control the stage electricians. As a
rule, however, auxiliary crafts are excluded, and so are, usually, the
unskilled workers. Some of the unions in this group unite, only a
very small proportion of the crafts in an industry. In such instances
the trades combined are usually more closely related than the others.
Thus, while the various crafts in the railway industry have always
been disunited, certain ones which are closely associated in the
operation of trains are organized in the Brotherhood of Railway
Trainmen. Similarly, while most of the trades in the printing indus-
try are organized separately, the several groups of workers engaged
in bookbinding ' are united in a single union, and so are, also, the
stereotj^ers and electrotypers. On the other hand, some organiza-
tions in this group have acquired jurisdiction over nearly all the
trades in an industry. Thus the International Seamen's Union con-
trols all seamen except the highly skilled marine engineers, mates, and
pilots, who have refused to affiliate with their less skilled fellow crafts-
men. Some organizations, such as the Molders' Union, claim juris-
diction over all except the auxiliary trades and the unskilled workers.
Others include the unskilled but not the auxiliary trades. Thus the
Cigar Makers' International Union admits workers of all degrees of
skill, from the person who selects the leaves of the tobacco to the
one who packs the finished cigars in boxes. The boast of the offi-
cials of the Amalgamated Meat Cutters and Butcher Workmen
of North America is that their organization makes no distinction
as to skill. The expert who strips the hide from the carcass of
378 TRADE UNIONISM AND LABOR PROBLEMS
the steer and the common laborer who pushes a truck are both
welcome as members. But, in order to escape jurisdictional disputes
with other organizations, both of these unions refuse to admit
auxiliary trades.
2. The second broad division of trade amalgamations, namely,
combinations of crafts working for different employers, contains only
a few organizations. These unite chiefly trades producing certain
materials and tools with trades using them. A good example is the
United Brotherhood of Carpenters and Joiners, which includes not
only the carpenters and. joiners employed on buildings in process of
construction but also the machine woodworkers employed in mills
where sash, doors, window frames, and other woodwork handled by
the carpenters are manufactured. Another example was the now
defunct American Railway Union, which included not only those
engaged in railway transportation but also the car-builders. The
great Chicago strike of 1894, which caused the destruction of this
union, was waged to secure better conditions of employment for those
engaged in building Pullman parlor cars.
Trades producing materials and tools have few interests in com-
mon with those using them. The two groups may, indeed, aid one
another by means of sympathetic strikes. Thus the carpenters may
aid the machine woodworkers by refusing to use sash, window frames,
or doors manufactured by nonunionists. The wall-paper machine
printers and color-mixers may aid the print-cutters by refusing to use
prints cut by unorganized labor. The bricklayers may aid the brick,
tile, and terra-cotta workers by refusing to lay brick made by non-
union workers. But cooperation by means of sympathetic strikes is
the only way by which such widely separated trades may help one
another, and the expediency of even this form of cooperation seems
doubtful. In the first place, the hostility to the strike declared in 1894
by the railway-transportation workers in favor of the Pullman-car
builders indicated that strikes in behalf of such remotely related
trades are held in much disfavor by the public, even when, as in the
above instance, all parties were united in the same organization.
Moreover, the employers consider that they have been treated very
unfairly when their employees, to whom they have granted favorable
terms, strike in behalf of a trade with which neither party has any
personal relations. Combination between such remotely related trades
RELATED TRADES IN AMERICAN UNIONS 379
seems undesirable. If they do attempt to combine, federation or
merely a written agreement would be preferable.
A small group of unions, some of which unite trades never having
the same employer, are those attempting to combine all workers
making goods from the same material. Frequently the manufactur-
ers of one article do not produce other articles from the same material.
Their employees compose an entirely separate trade and are never
associated in the same industrial establishment with the workers on
the other articles. An example was the Amalgamated Rubber Work-
ers' Union, which was composed of workers on all kinds of rubber
goods, such as parts for mechanical appliances, bicycle tires, auto-
mobile tires, and rubber shoes. The men who make rubber tires for
bicycles and automobiles possess no special facility for making rubber
overshoes, nor do employers who manufacture rubber overshoes ever
manufacture rubber goods for mechanical appliances. In fact, there
is a territorial division of production. Rubber overshoes are produced
largely in New England and rubber goods for mechanical appliances
in other parts of the country, particularly New Jersey. The Amalga-
mated Rubber Workers' Union was, therefore, an unnatural com-
bination of groups of workers having no interest in common. Its
membership, indeed, was always small, and it soon went to pieces.
Another example is, perhaps, the United Brotherhood of Carpenters
and Joiners, which .absorbed quite recently the machine woodworkers
and furniture workers and is planning soon to include also the box-
makers and wooden-ship builders, and which hopes some day to have
jurisdiction over all woodworkers in North America. Some of the
trades which the United Brotherhood of Carpenters and Joiners seeks
thus to unite possess few interests in common, and there is grave
doubt whether real unity could ever be secured by such a wide-
reaching organization.
The first essential for a successful combination of related trades is,
therefore, that such trades have the same employers. If, in addition,
such a combination admits neither auxiliary trades nor unskilled
workers, its desirability will not be questioned by trade-union leaders.
In fact, the only debatable question is whether such an organization
should be a federation of national craft unions or an amalgamation of
local craft unions. If, as in the printing industry, the lines of demar-
cation between the trades are rigidly fixed ; and if, because one trade
38o TRADE UNIONISM AND LABOR PROBLEMS
outnumbers the others, an amalgamation may disintegrate, as did
the International Typographical Union ; and if a satisfactory balance
of power cannot be secured by carefully weighted representation in
conventions and on general executive boards, — a federation may be
preferable. If, as in the building industry or the railway industry,
the related crafts have been long and successfully organized into
separate national trade-unions, there will be much objection to the
dismemberment of these associations, and the first successful attempt
at combination will probably be a loose federation. If none of a
group of related crafts outnumbers greatly the others, and if the
divisions between trades are not rigidly fixed, so that laborers pass
readily from one kind of work to another, the successful establish-
ment of an amalgamation may be an easy task.
Two matters of long and bitter controversy that have arisen con-
cerning combinations of trades working for the same employers have
related (i) to the admission of auxiliary trades found in a number
of industries and (2) to the admission of unskilled laborers. We
shall first consider the method of organizing auxiliary trades. The
industrial unionists favor their distribution among several industrial
unions. The trade autonomists favor their combination into a single
craft union. In behalf of the policy of distributing the members of
an auxiliary trade among several industrial unions, it may be argued
that such a craft gains much from its ability to cooperate for purposes
of collective bargaining with other employees in the same establish-
ment. Trades like the patternmakers, the stationary engineers, and
the stationary firemen are especially handicapped unless the related
trades aid them by declaring strikes in sympathy, for the reason
that there are usually so few of these workers in each establishment
that the employer can readily find sufficient nonunionists to take
their places. On the other hand, cooperation for purposes :of col-
lective bargaining between members of an auxiliary craft in different
industries is unnecessary. It is not even needed to maintain uni-
formity of wages, since such uniformity is required only between
competing establishments in the same industry. In favor of combin-
ing the members of an auxiliary trade into one craft union, it may be
argued that the supply of workers in a trade can be effectually regu-
lated only when its members are so united. If distributed among
several industrial unions, limitation of apprenticeship is impracticable,
RELATED TRADES IN AMERICAN UNIONS 381
and there is no way of preventing the members in one industry from
taking the places of fellow craftsmen in other industries by acting as
strike breakers or by offering to work for lower wages. At the same
time, the free movement of the members of the trade from one
industry to another is checked by the erection of artificial barriers.
• Those members of an auxiliary trade Who have had to undergo
additional training in order to do the work in a particular industry
are affected very indirectly by the total supply of workers in the
craft and hence may amalgamate very profitably with other em-
ployees in the same industry. The Carriage and Wagon Workers'
International Union claims that the carriage blacksmiths are special-
ists and hence can gain nothing from affiliation with the union of
blacksmiths. The cutting-die and cutter makers, who manufacture
the dies used in cutting cloth, paper, leather, and other materials
according to various patterns, declare that they have no interests in
common with the blacksmiths and machinists, from whom their ranks
are recruited. Special training is required to do this work, and as the
waste of material makes the cost of teaching new hands very high,
the cutting-die and cutter makers are only slightly affected by the
demand for machinists and blacksmiths.
When the members of a trade require no special training for the
work in each of the industries in which they are employed, a com-
promise seems necessary. Trade-union officials have suggested that
the members of such a trade might belong both to the craft union
and to one of several industrial unions. Power to declare strikes and
to bargain with employers could be vested in the industrial unions.
The craft union could limit the supply of workers in trade and pre-
vent individual competition for employment between them, and if the
scope of its activities were limited to these matters there need be no
overlapping of functions between it and the industrial unions.
The second question to be considered is whether the skilled and
unskilled workers in an industry should be combined in the same
organization. Undoubtedly the unskilled gain greatly from such an
alliance. Organizations composed wholly of unskilled workers, such
as the International Brotherhood of Foundry Employees, the Inter-
national Association of Glass House Employees, the International
Hod Carriers' and Building Laborers' Union, and the Interna-
tional Association of Blast Furnace Workers and Smelters, are
382 TRADE UNIONISM AND LABOR PROBLEMS
practically impotent to improve the conditions of their members-
Since their work requires little or no training, strikes are useless.
From the large standing army of unemployed, men and women can
readily be secured to take their places. The International Hod
Carriers' and Building Laborers' Union makes no mention of strikes
in its constitution. In fact, the international organization pays no-
strike benefits and rarely declares a strike. The local societies of
building laborers have derived the strength to maintain strikes and
otherwise bargain with employers from the aid which they have
secured from the skilled trades by affiliation with local building
trades councils. The Laborers' Union Protective Society of New
York City, composed of bricklayers' and masons' helpers, has secured
favorable conditions of employment for its members only through
the help of the New York local unions of bricklayers, which have
declared strikes in their behalf and have secured the inclusion of
provisions favorable to the helpers in their agreements with the
contractors.
The formation of a vast organization of unskilled workers iii all
industries has been suggested by trade-union officials. The Laborers'
International Protective Union, with jurisdiction over all unskilled
and general laborers, male and female, was formed several years ago,
but never attained any real importance. The constant tide of immi-
gration into the United States makes any effective regulation of the
supply of general labqrers impracticable. Moreover, unskilled work-
ers can be kept faithful to the union only with great difficulty. During
unemployment, which is very frequent among them, they are expelled
for failure to pay dues, for acting as strike breakers, or for selling
their labor at less than the union scale of wages. Those advocating
one large organization of unskilled workers suggest the payment of
sick and out-of-work benefits to prevent the members from breaking
away from the union when in economic distress. But the ability of
these workers, with their low wages and frequent unemployment, to
maintain such benefits seems doubtful.
The chief hope of the unskilled workers rests in an alliance with
the skilled, but the skilled gain nothing by such an alliance. On the
contrary, such amalgamation entails a sacrifice, since it imposes on
the skilled the obligation of fighting battles in behalf of the unskilled.
The keynote of the dominant unionism has been self-interest. The
RELATED TRADES IN AMERICAN UNIONS 383
consistent pursuance of this policy by the American Federation of
Labor and its constituent international unions has made them succeed
where the Knights of Labor, with its altruistic ideals of brotherhood,
failed. Following this policy, the skilled trades have refused to unite
with the unskilled.
There are aristocracies even among the aristocrats. Certain trades,
whose members possess a higher degree of efficiency and training than
do their fellow employees, have refrained from entangling alliances.
The exclusiveness of the locomotive engineers has undoubtedly helped
to prevent the successful federation of all railway employees. The
bricklayers have held aloof from local and national federations of
the building trades. The marine engineers have refused to affiliate
with the International Seamen's Union. Years ago the window-glass
blowers and gatherers were reluctant to amalgamate with the less
skilled window-glass cutters and flatteners. Today the situation is
reversed. The introduction of machinery has greatly reduced the
skill of the blowers and gatherers, and the cutters and flatteners, who
now possess the greater skill, have seceded from the amalgamation
of window-glass workers to form an independent organization. The
lasters were for some years the aristocrats among the boot and shoe
workers. The introduction of machinery greatly reduced the skill of
all boot and shoe workers except the lasters. About 1885 the lasters
formed a strong union, while the other trades were unorganized
or maintained weak, struggling unions. In consequence, the lasters
gained at the expense of the members of other crafts, for the em-
ployers, fearing to provoke them to resistance, permitted their wages
to remain the same when reducing those of the other trades and even
secured reimbursement for increases in the wages of the lasters by
imposing reductions on those of the other crafts. Similarly, the
cotton mule spinners were able for many years to obtain high wages
at the expense of the other unorganized groups of workers in the
cotton industry.
Introduction of machinery and further division of labor have forced
many of these highly skilled trades from their position of aloofness.
.With the replacement of the mule by the ring fram6, which can be
manipulated by women and children, cotton mule spinning has be-
come a vanishing craft. After 1890 the new lasting machinery greatly
demoralized the lasters' unions. Certain processes could be done by
384 TRADE UNIONISM AND LABOR PROBLEMS
boys, and one could pass fairly rapidly from the easy to the more
difficult parts of the work. The lasters were, therefore, quite willing
to join with the other trades in forming a single amalgamation of
boot and shoe workers in 1895.
This breaking down of the barriers between trades is bringing
about for the most part, however, only the amalgamation of groups
whose work requires some degree of skill. The unskilled, who are
most helpless, remain largely without effective organization. Never-
theless, as division of labor becomes more minute, as the old method
of apprenticeship fails, and as the groups of skilled and semiskilled
are being recruited in an increasing number of instances by the pro-
motion of the common laborers required for the many odd jobs exist-
ing in every industrial establishment, the other trades are manifesting
a growing tendency to admit such potentially dangerous competitors
to their unions. Thus the plumbers and the steam fitters, the boiler-
makers, the tile-layers, the blacksmiths, the pressmen, and some other
trades admit their helpers to membership in their unions, because,
while these helpers are not apprentices, they have opportunity to
learn the trade and often become efficient journeymen. The Amalga-
mated Meat Cutters and Butcher Workmen of North America admits
workers in the meat industry, irrespective of skill ; and in 1904 all
classes of employees in the Chicago packing houses went on strike
to raise the wages of the least skilled and most poorly paid, the
reason being that labor has been so minutely subdivided in the pack-
ing houses that the immigrant can be trained in a few months to even
the most difficult of the processes. Some of those who are handling
trucks and doing other odd jobs have been displaced from more
skilled positions. They can slaughter and cut up the whole ox, hog,
or sheep, and would be glad to regain their old positions at less
wages than those now holding them are receiving. Moreover, the
wages of all employees in the packing houses bear a fixed proportion
to the amount paid to the least skilled. So the Amalgamated Meat
Cutters and Butcher Workmen desires control over the general
laborers, and declared the strike of 1904 in their favor to keep them
satisfied with their present employment and indirectly to raise tha
wages of the more skilled employees. Instances in which the self-
interest of the skilled workers demand their amalgamation with the
RELATED TRADES IN AMERICAN UNIONS 385
unskilled are still rare, however. If common laborers are admitted in
the near future to unions of other workers in the same industry, they
will be admitted not from self-interest but from more altruistic
motives, from a growing spirit of class consciousness attended, perhaps,
by a correspondingly growing realization of class responsibility.
Theodore W. Glocker
University of Tennessee
XXVII
THE DOMINANCE OF THE NATIONAL UNION IN
AMERICAN LABOR ORGANIZATION^
TRADE-UNIONISTS in all industrial countries have developed
a number of distinct forms of grouping. At the present time,
for example, American trade-unionists are organized into local trade-
unions, national trade-unions, city federations, a national federation,
local trades councils, and national trades councils.^ The same union-
ist may be included in all of these six forms of grouping. A Balti-
more printer, for example, may be a member of the local union of
his trade — the Baltimore Typographical Union; of the national
union of his trade — the International T5^ographical Union ; of the
city federation — the Baltimore Federation of Labor; of a national
federation — -the American Federation of Labor ; of a local trades
council — the Baltimore Allied Printing Trades Council ; and, finally,
of a national trades council — the International Allied Printing Trades
Association.^ Each of these forms of grouping might, therefore,
embrace all the trade-unionists in the United States. As a matter of
fact, some of them include in their membership only a small part of
the total number of trade-unionists. The number of members of all
the local trades councils in the United States, for example, is probably
less than one fourth of the total number of trade-unionists.
. iProm the Quarterly Journal of Economics, Vol. XXVII (1913), pp. 455-481.
2 There are other forms of grouping, as, for example, state federations and
state and district unions of the local unions in particular trades, but these have
played a relatively small part in the organization of labor in the United States
and are, therefore, omitted from the present discussion.
3 The terminology of American trade-union structure is much confused. The
city federation, as it is called here (that is, the federation of the local unions in
a city), is known by various other names; for example, "labor assembly,"
"trades' union," "trades council," and "central labor union." In the constitu-
tion of the American Federation of Labor city federations are denominated
"central trade and labor unions" or, more briefly, "central bodies." The local
trades councils, as they are called here (that is, the local unions of allied trades
in a particular city), are also frequently referred to as "central bodies."
386
THE NATIONAL UNION 387
The forms of trade-union grouping have steadily increased in
number. The local trade-union dates its origin from the beginning
of the nineteenth century; the city federation from 1827; the
national trade-union, as an effective form of organization, from 1850.
Trades councils, local and national, are a development of the last
twenty-five years.
The interrelations of these forms of grouping — the elements in
American labor organization — have been determined slowly, and
from time to time the changing needs of the trade-union movement
have necessitated readjustments of these relations. As might be ex-
pected from the political analogy, the relationship which has proved
most practicable has been the dominance of some one of the forms of
grouping over the others. Whenever the tide of trade-unionism has
risen markedly, the desire to give unity to the labor movement has
led to the assumption of leadership and control by one or another of
the forms of grouping. In the history of American labor organization
four distinct structural forms are distinguishable, each of which
emerges in a time of rapid growth in the trade-union movement. The
periods in the development of the structure of American labor or-
ganization may accordingly be roughly defined as extending from
1800 to 1815, from 1827 to 1838, from 1879 to 1888, and from 1897
to the present. In the years between these periods the labor move-
ment was relatively weak, and the relations of the various forms of
grouping were less sharply defined.
In the earliest period — from the end of the eighteenth cehtury to
about 181 5 — the local union was the only form of trade-union
grouping. Among the local unions of different trades in the same city
there was no substantial connection; communication between the
local unions of the same trade in different cities was rare, and
cooperation among them slight.
The second period, extending from 1827 to 1838, was marked by
the rise of the city federation, or, as it was then called, the trades'
union. The admirable study of this period by Professor Commons
and Miss Sumner shows that the labor movement of the period was
largely directed and controlled by the city federations.^ Attempts
to form national trade-unions were made, but failed. The city
federations united to form a national federation, — the National
1 Documentary History of American Industrial Society, Vols. V, VL
388 TRADE UNIONISM AND LABOR PROBLEMS
Trades' Union, — but this exercised practically no power and its
life was short.
A characteristic feature of American trade-unionism from 1865
to 1888 was the formation of a number of national federations in
which the controlling elements were the city federation and, to a less
extent, the local union. The International Industrial Assembly of
North America, organized in 1864, the National Labor Union, active
from 1866 to 1870, the Industrial Congress, organized in 1873, and
the Knights of Labor, organized as a national federation in 1878,
were alike in this respect. These national federations were designed
to exercise functions distinct from those exercised by the national
and local unions, but the evident desirability of bringing the entire
labor movement into unity led in the latest and strongest of these
organizations, the Knights of Labor, to the gradual development of
the idea that the national federation should be dominant in the
structure of labor organization. The opposition of the national trade-
unions to a structural form in which the national union became sub-
ordinate to the national federation led to the bitter struggle between
the Knights and the national unions which characterized the years
from 1885 to 1888.
The fourth period in the structural history of American trade-
unionism — from 1897 to the present — has been distinguished by
the increasing control exercised by the national trade-union over the
other forms of grouping. This development, which forms the subject
of the present paper, will be treated with reference to (i) local
unions, (2) national federations, (3) city federations, (4) local and
national allied-trades councils.
The present dominance of the national union in American labor
organization is based upon the steadily increasing control exercised
by the national unions over the local unions. This development
presents two aspects. In the first place, the degree of control which
the national union exercises over its affiliated local unions is impor-
tant, since both the power and the desire of the national union to
control the other forms of labor organization are directly proportional
thereto. Secondly, the extent to which local unions are affiliated with
some national union is also important, since if a large part of the
THE NATIONAL UNION 389
local unions were independent, the power of the national union to
control the other forms of labor organization would be much less
than it is.
In both respects the control of the national unions over the local
unions has increased rapidly in recent years. The increase in the
degree of control over the affiliated local unions — ordinarily described
as centralization — has been due to a variety of causes, chief among
which are the establishment of nationally administered( beneficiary
features, the financing of strikes by the national unions, and the
negotiation of national agreements with employers. These extensions
of activity on the part of the national union have necessitated an
increasingly stricter control by the national union over its affiliated
local unions, which has exhibited itself in many ways, such, for
example, as the national regulation of admission requirements, the
national control of strikes, and the adoption of national working rules.^
The extension of control by the national union over a larger and
larger number of the local unions in its trade or industry is closely
connected with the growth in centralization. The same considerations
which lead affiliated local unions to transfer a large part of their
activities to a national organization are influential in leading un-
affiliated unions to ally themselves with the national union in their
trade. The advantages to be obtained, however, have not been the
only force making for the affiliation of the independent unions. The
national unions have exerted pressure on the unaffiliated unions by
discriminating against their members who seek work in other cities
and, wherever practicable, by establishing rival local unions. More-
over, as will be shown below, the national unions have used their
increasing control of the city federation and the local trades council
to force the independent unions to affiliate.
The result has been that American local trade-unions are con-
nected with some national union probably more generally than the
1 Various aspects of this development have been described in detail by several
writers. See Adams and Sumner, Labor Problems, pp. 228-230; Carlton, History
and Problems of Organized Labor, pp. 95-110; McCabe, The Standard Rate in
American Trade Unions, pp. 120-178; Wolfe, Admission to American Trade
Unions, pp. 11-33; Spedden, The Trade Union Label, pp. 32-51; Sakolski, The
Finances of American Trade Unions, pp. 12-20, 46; Kennedy, Beneficiary
Features of American Trade Unions, pp. 106-120; Glocker, The Government
of American Trade Unions, chaps, v, vi; Barnett, The Printers, pp. 29-40.
390 TRADE UNIONISM AND LABOR PROBLEMS
local unions in any other country. It is one of the curious phenomena
of trade-unionism that although local and sectional trade-unions still
survive in England, they have almost entirely disappeared in the
United States, despite the enormously greater area covered. In the
United Kingdom, for example, the following unions of compositors
were in existence in 1910 : London Compositors, Dublin Typographi-
cal Society, Typographical Association, Scottish Typographical Asso-
ciation.^ In the United States in the same year there was no important
independent local union of compositors or sectional association of
such unions. All the local unions were affiliated with the Interna-
tional Typographical Union. Essentially the same contrast is found
ir a number of other trades.^
II
As long as the national unions had slight control over their affiliated
local unions they did not seriously object to the formation of national
federations in which city federations and local unions were the
dominant elements. With the growth of the power of the national
union over the local unions, the national unions in which centrali-
zation was greatest became strongly dissatisfied with such national
federations, particularly if they encroached upon the functions of
the national union .^
The question did not become acute, however, until the great in-
crease in the strength of the Knights of Labor, and the transformation
in the attitude of that organization toward the national unions. In
1886 the national trade-unions, desirous of defending themselves
against the threatened domination of the Knights, took over and
reorganized the Federation of Organized Trades and Labor Unions
^Labour Department Report on Trade Unions in 1908-1910, p. Jo.
2 No data are available as to the number of independent local unions in the
United States as a whole, but some indication of the number may be obtained
from the annual reports made to the Massachusetts Bureau of Statistics by
labor organizations in that state. In igio, according to information kindly
furnished by the Director of the Bureau, of some 1250 local unions in Massa-
chusetts all except twenty were affiliated with some national union or with the
American Federation of Labor. See also the Bureau's Fourth Annual Report
on Labor Organizations, 191 1, p. 76.
3 For an account of the attitude of the stronger national unions towards the
national federations from 1863-1885 see Kirk, National Labor Federations in
the United States, pp. 17-26.
THE NATIONAL UNION 391
of the United States and Canada, a national federation which had
been organized in 188 1. According to the original constitution of the
Federation the national unions were allowed one delegate if their
membership was less than 400, two delegates if 4000, three if 8000,
four if 16,000, five if 32,000, and so on. Each local trades assembly
or city federation was allowed a single delegate irrespective of the
number of its members. In 1882 the plan of representation was
slightly altered. Assemblies of the Knights of Labor and local trade-
unions were given the same representation as city federations, and
state and provincial federations were allowed two delegates. In sev-
eral of the sessions of the Federation prior to 1886 the voting strength
of city federations and local unions was greater than that of the
national unions.^
In 1886, when the Federation assumed its present title, — the Amer-
ican Federation of Labor, — the basis of representation was altered so
as to exclude from reprfesentation all local unions of trades in which
national unions existed.^ This change did not entirely satisfy the
national unions, since it was possible that a large number of local
unions in those trades in which there were no national unions might
be affiliated directly with the Federation.^ Mbreover, the representa-
tives of city federations might easily have become sufficiently numer-
ous to outvote the delegates of the national unions. A year later,
in 1887, the national unions, therefore, made their control of the
Federation unassailable by the adoption of the provision that if a
roll call was demanded* each delegate, except those of city or state
federations, might cast one vote for every one hundred members
iln 1883, for instance, fifteen of the twenty-seven delegates were representa-
tives of local trade-unions, city federations, and state federations.
2 National unions were given the same representation as before, and "each
local or district trades organization or federated body not connected with, or
having a National or International head affiliated with, this Federation" was
allowed one delegate.
5 A delegate from the International Typographical Union to the session of
the Federation held in 1886 suggested in his report to his union that "local
organizations in a single large city could be so strongly represented as to out-
number all the duly accredited delegates from distinctive national and inter-
national bodies" (Proceedings of the International Typographical Union, 1887,
p. 66).
*In 1888 it was provided that a roll call might be demanded by one fifth of
the delegates, and in 1889 the present rule that a roll call may be demanded by
one tenth of the delegates was adopted.
392 TRADE UNIONISM AND LABOR PROBLEMS
which he represented.^ The representatives of city and state feder-
ations were allowed, as before, only one vote. The delegates of local
unions directly affiliated with the Federation may cast one vote for
each hundred members, but the total membership of these unions is
small compared with that of the national unions, and on account of
the expense many of them are unable to send delegates.
By these changes the national unions were given an overwhelmingly
large voting power in the Federation. The convention of 191 1 will
furnish an illustration. The total number of delegates present was
349. Of these, 228 were delegates of national unions, 25 of state
federations, 67 of central federations, 21 of trade and federal labor
unions directly affiliated, and 6 of fraternal organizations. The num-
ber of delegates of national unions was nearly two thirds of the total
number, and the voting strength on roll call of the national unions
was 17,104 of a total vote of 17,240. Moreover, it has become cus-
tomary for the national unions to send as part, at least, of their
delegation important officials of the national union. The sessions of
the Federation are thus to a very considerable extent councils of the
executives of the national unions.
Throughout the whole period since 1886 the national unions have
been, more and more firmly resolved tliat the trade-union movement
should not be transformed into that semipolitical form which has
always characterized it when the city federation and local union have
had control of the national federation. On several occasions repre-
sentatives of the city federations have complained at the sessions of
the Federation that their voting strength is too small. In 1900, for
instance, a resolution providing that each delegate from a national
union should be allowed only a single vote on roll call was introduced,
but was voted down without discussion.^ It was proposed in 1900 that
the delegates from city federations should be permitted to cast the
iln the report of the delegates from the Typographical Union to the session
of J887 the purpose in making this change was stated as follows: "The basis
of representation and manner of voting prescribed by the old constitution gave
central labor unions and state assemblies a vote out of proportion to their
strength, and enabled the smaller bodies to exert an undue influence in the
control of the affairs of the Federation. But for this fact the constitution would,
no doubt, have been so changed as to admit national and international bodies
only. This can be done at the next session, if desirable. . . ." (Proceedings
of the International Typographical Union, 1888, p. 157).
^Proceedings of the American Federation of Labor, igoo, pp. 40, 155.
THE NATIONAL UNION 393
votes of local unions directly affiliated with the Federation and con-
nected with the city federation, but this proposal also was defeated.^
In 1902 an interesting attempt was made to organize a new na-
tional federation. The Milwaukee city federation issued a circular
letter calling a national convention to be composed of the representa-
tives of city federations. The executive council of the American
Federation of Labor immediately, to quote their account, "used our
good offices to persuade the central labor unions and other central
bodies from pursuing this mistaken course. . . ." The plan was not
abandoned, however, and at the session of the Federation in 1902
Mr. Victor Berger, the delegate from the Milwaukee city federation,
introduced a resolution providing for a convention of delegates from
city federations in cities of over 50,000 inhabitants "to consider the
conditions and evils peculiar to the large cities and dangerous and
oppressive to the laboring people living therein." Despite Mr. Berger's
assurance that the Milwaukee city federation "had no design to
organize a body antagonistic to the A. F. of L.," a committee of
the Federation reported unfavorably on the project on the ground
that there were " already adequate means to promote such propaganda
through the various local, central, and state bodies."^ The proposed
federation would have been practically identical in its composition
with the long line of national federations which began with the
National Trades' Union of 1834 and ended with the Knights of Labor.
The number of national unions affiliated with the American Fed-
eration of Labor has increased steadily since 1897. In 191 1 the only
important national unions not in affiliation with the Federation were
the Locomotive Engineers, the Locomotive Firemen and Enginemen,
the Railroad Trainmen, the Railway Conductors, the Flint Glass
Workers, and the Bricklayers and Masons. The total membership
of the nonaffiliated unions in 19 11, at a liberal estimate, did not
exceed 600,000, while the membership of the affiliated unions was
approximately 1,800,000.
No rival national federation has been able in this period to offer
effective competition. The Knights of Labor has been practically an
extinct organization. The American Labor Union, organized in 1902
to promote industrial unionism, went out of existence in 1905. The
1 Proceedings of the American Federation of Labor, 1900, p. 155.
^Id. 1902, pp. 49, no, 205.
394 TRADE UNIONISM AND LABOR PROBLEMS
Industrial Workers of the World, organized in 1905 as the successor
of the American Labor Union, lost in 1907 the support of its only-
important national union, the Western Federation of Miners, which
affiliated in 191 1 with the American Federation of Labor. The mem-
bership of the Industrial Workers of the World — in 191 1 about
10,000 — is relatively insignificant.
Ill
The control of the American Federation of Labor by the national
unions has not only been important in itself, but through the Fed-
eration the national unions have acquired such control as they now
have over the city federations. In every time of labor unrest since
1827 city federations — known variously as trades' unions, working-
men's assemblies, district assemblies, or central bodies — have come
into existence in the chief industrial centers. In the earlier periods
of American trade-union history these organizations called sympa-
thetic strikes, declared boycotts, and sustained strikers with financial
aid. To many of their activities the national unions had no objection,
but at other points conflict occurred. With the increasing centraliza-
tion of the national unions it became intolerable that their policies
should be interfered with by local federations.
The control exercised by the Federation of Labor over city feder-
ations is based on the preference shown by local unions for city
federations affiliated with the Federation as against independent city
federations, since the Federation can obviously not impose rules on
unaffiliated organizations. In 19 11 there were 631 city federations
affiliated with the American Federation of Labor. The number of
independent city federations is at present very small. ^ There have
been, however, even within recent years important independent city
federations, and some of these were in cities in which there were
also city federations affiliated with the Federation.
The Federation has been able to attach to itself so many city
federations largely through the steady pressure of the national unions
on their local unions. In 1893, by a provision in the constitution of
the American Federation of Labor, it was made " the duty " of all
^The secretary of the American Federation of Labor, Mr. Morrison, informs
the writer that in November, 1912, in only two cities of considerable popula-
tion were there independent city federations.
THE NATIONAL UNION 395
affiliated national unions "to instruct" their local unions to join the
city federations.^ The national unions, however, have consistently re-
fused to allow any mandatory rule to be passed by the Federation
requiring local unions to affiliate with city federations, although such
proposals have been presented and strongly urged, particularly by
the delegates from city federations, at almost every recent session of
the Federation.^
Even where an independent and an affiliated city federation have
existed jn the same city, the Federation has been able to do nothing
more than endeavor to persuade the officers of the national unions
to bring pressure on the local unions in favor of the affiliated
federation. In 1907 the delegate from the Brooklyn city feder-
ation introduced at the convention of the Federation a resolution
which recited that there were in Brooklyn two city federations,
and that a considerable number of local unions belonging to na-
tional unions affiliated with the Federation were allied with the
independent city federation. The convention of the Federation in-
structed its executive council through the national unions to "compel"
the local unions to withdraw and to join the city federation chartered
by the Federation.^ Two years later the delegate of the Brooklyn
city federation called attention to the fact that this order had not
been obeyed and asked the convention to provide specifically that
if any national union refused to compel its local union to withdraw
from the unaffiliated city federation it should be expelled from the
Federation. The convention, however, merely reiterated its instruc-
tions to the executive council.*
It is not difficult to understand the reluctance of the national unions
to make the affiliation of their local unions compulsory. If a city
federation becomes unsatisfactory to a local union it may withdraw
at will, or in case a city federation pursues distasteful policies a na-
tional union may even encourage or order its local union to withdraw.
The local unions have, therefore, always open a way of escape. Since
^Proceedings of the American Federation lof Labor, 1893, p. 4.
^In 1 901 a committee of the Federation, in reporting on several resolutions
which aimed at forcing local unions to af&Iiate, said, "Your committee reports
adversely, for the reason that the Federation has not mandatory power to
legislate for national and international unions" (Proceedings, 1901, p. 198).
^Proceedings of the American Federation of Labor, 1907, pp. 240, 289.
^Id. 1909, p. 279.
396 TRADE UNIONISM AND LABOR PROBLEMS
the city federation has no power to retain local unions, its conduct
must commend itself to the local unions or they will leave, and the
seceding unions may, if they see fit, form a rival city federation.
No more effectual check on the exercise by city federations of any
real power over the constituent unions could well have been devised.
Although the city federation has not yet been brought sufficiently
under the control of the national unions acting through 'the Federation
to make it appear desirable to the national unions that local unions
should be forced to affiliate, a beginning in such control has been
made. The first and most important step in this direction was to
limit the power of the city federations to admit local unions. Under
the constitution of the American Federation of Labor, until 1886, a
city federation might admit local unions at its own discretion. The
constitution of 1886 provided that city federations were not to admit
delegates "from any local organization that is hostile to the objects
of this Federation or that has been suspended or expelled by a
National or International organization of their trade." The rule was
amended at various times, chiefly in order to make its provisions more
explicit,^ but since 1897 it has been substantially in its present form.^
As it now stands it reads as follows :
No Central Labor Union, or any other central body of delegates,
shall admit to or retain in their councils delegates from any local or-
ganization that owes its allegiance to any other body, National or
International, hostile to any affiliated organization, or that has been
suspended or expelled by, or not connected with, a National or
International organization of their trade herein affiliated, under
penalty of having their charter revoked for violation of their charter,
subject to appeal to the next Convention.^
The rule has been invoked in two classes of cases. In the first
place, city federations have been required to exclude local unions
which have been suspended by, or have seceded from, or are merely
iFrom 1888 to 1893 the rule required city federations to exclude local unions
of national unions not affiliated with the Federation, but since 1893 city federa-
tions have been permitted to admit the local unions of unaffiliated national
unions which are not hostile to national unions affiliated with the Federation.
2 Until 1902 a city federation which disobeyed the rule was deprived of
representation. Since then the charter has been withdrawn (Proceedings of
the American Federation of Labor, 1902, p. 216).
^Constitution of the American Federation of Labor, 1912, Article XI,
Section i.
THE NATIONAL UNION 397
not attached to, the national union of their trade, if the national
union is affiliated with the Federation. In 1891, for instance, the
San Francisco Trades and Labor Assembly, a city federation, was
suspended from further representation in the Federation because it
refused to exclude a local union which had been suspended by the
Brewery Workers.^ The Federation has consistently required the
city federations to maintain the principle that every local union
should, if possible, be connected with a national union. The city
federations, governed largely by local considerations, if left to them-
selves would frequently have offered aid and comfort to seceding and
independent unions, and to that extent have contributed to the
support of local as against national unionism.
In the second place, city federations have been required to exclude
local unions affiliated with a national union which is not connected
with the Federation and which aims to include in its membership
classes of workmen which are recognized by the Federation as prop-
erly belonging to a national union so affiliated. In violation of the
rule city federations have not infrequently admitted such local unions
and refused to unseat their delegates when ordered to do so. From
time to time charters of city federations have been revoked in par-
ticularly offensive cases and new federations formed from the local
unions. There has been increasing strictness in the enforcement of
the rule. In 1908 a large number of city federations admitted the
local unions of a national union of electrical workers, although
another national union in the same trade was affiliated with the
Federation. Other city federations admitted local unions of the Flint
Glass Workers, who at that time were engaged in a bitter jurisdic-
tional dispute with the Glass Bottle Blowers, a union affiliated with
the American Federation of Labor. These city federations persisted
in their course after notice and were deprived of their charters by the
executive council of the Federation. On appeal to the convention
the council was sustained.
The national unions regard it as a well-settled principle that only
one national union may have jurisdiction over a particular class of
workmen. They have found that the support of city federations has
been one of the chief factors in promoting and encouraging the forma-
tion of rival national unions, and they have become more and more
1 Proceedings of the American Federation of Labor, 1890, p. 39.
398 TRADE UNIONISM AND LABOR PROBLEMS
determined that the city federation shall not lend its aid to such
rebellions.
The right of a city federation to exclude a local union of a national
union affiliated with the Federation has also been restricted. As early
as 1897 the executive council of the Federation decided that it was
improper for a city federation to expel a local union merely because
its national union was involved in a controversy with another na-
tional union.^ In 1901 the Chicago Federation of Labor was ordered
to readmit the delegates of an expelled local union.^ These decisions
were not based on any specific clause in the constitution, but in 1902
a section was added which provided that a city federation might not
reject the credentials of the delegates from a local union of a na-
tional union affiliated with the American Federation except on charges
duly proved. The delegate or local union concerned was given a
right of appeal to the executive council of the Federation.^ This
right has been freely used, and in 1908, when certain city federations,
on account of a jurisdictional dispute between the Plumbers and
the Steam Fitters, refused to admit delegates from Steam Fitters'
local unions, the convention of the Federation ordered the executive
council to issue a general order to all city federations that they must
admit the delegates of local unions of Steam Fitters.*
The national unions have not been content merely to secure that
their interests are safeguarded in the composition of the city feder-
ation. They have also gradually evolved a code of rules to be fol-
lowed by the city federations in the conduct of their affairs. These
rules relate to the boycott, to assessments for strikes, and to interfer-
ence in collective bargaining — fundamentally important activities of
the city federation.^
The initiation and support of boycotts has always been one of the
chief functions of the city federation. Comprising representatives of
unions of all trades, the power of the city federatioh as a boycot-
ting instrument has been very great. Desirous of turning this power
to their service, the national unions have yet found difficulty in
1 Proceedings of the American Federation of Labor, 1897, P- 35-
^Id. 1901, p. 158.
^Id. 1902, p. 21s; 1904, p. 243.
*Id. 1908, p. 192.
= See Burlte, History and Functions of Central Labor Unions, p. 80.
THE NATIONAL UNION 399
controlling it, since city federations have not infrequently initiated
boycotts which were distasteful to one or more national unions.
In 1 90 1 a provision was inserted in the constitution of the Amer-
ican Federation of Labor forbidding city federations to orginate boy-
cotts and requiring them before indorsing boycotts proposed by local
unions to investigate the matter and to effect if possible an amicable
settlement.^ On several occasions city federations have been forced,
on complaint of national unions, to call off boycotts. Even yet many
of the boycotts indorsed by city federations give great offense to
national unions. In 1903 the delegates of the Boot and Shoe Workers'
National Union introduced a resolution at the convention of the
Federation that no business concern which manufactured and sold
goods outside of the city in which the city federation was situated
should be placed on the unfair list by the city federation without
the sanction of the national union whose interests were involved.
The committee of the Federation which considered this resolution
recommended that only boycotts on firms doing an interstate busi-
ness should be submitted to the national union concerned. After
much discussion the proposed rule was defeated.^ In 1904 the same
subject was brought up, but the convention again showed itself
reluctant to adopt a rigid rule.^
The assessment of local unions by city federations for the support
of strikes has been the occasion of frequent complaint by the national
unions. The stronger national unions finance their, own strikes, and
they strongly object to having their members required to support
the strikes of local unions whose national unions are unwilling or
unable to pay strike benefits. The general use of such assessments
would obviously greatly weaken the hold which the national unions
have on their local unions and tend correspondingly to increase the
power of the city federations. On the other hand, it is felt that on
certain occasions, when local interests are much involved, some
power should be left to city federations to raise funds. At the session
of the American Federation of Labor in 1904 Mr. MacArthur, a dele-
gate of the Seamen's Union, proposed that the city federations should
be advised that assessments ought not to be levied on the affiliated
imions. The convention was unwilling to forbid all assessments, but
1 Proceedings of the American Federation of Labor, 1901, p. 196.
2W. 1903, p. 182. ^Id. 1904, p. 234.
400 TRADE UNIONISM AND LABOR PROBLEMS
did advise the city federations that assessments should only be levied
after the question had been submitted to the membership of the
affiliated unions.^
Finally, the national unions have strongly resented the uninvited
interference of city federations in the negotiations between local
unions and employers. National unions are not infrequently glad
to avail themselves of the aid of the city federation in dealing with
employers, but the stronger national unions object to any attempt on
the part of the city federations to take the lead in such matters. In
1898 a section was added tp the constitution of the Federation which
provided that a city federation should not have authority to order a
strike of any local union without the consent of the national union.^
In 1906 an additional section provided that, a city federation must
take no part in " the adjustment of wage contracts, wage disputes, or
working rules of local unions affiliated with a National or Interna-
tional union " unless the rules of the national union permit or unless
consent is given by the officials of the national union.''
From the foregoing survey it will be seen that the city federation
has been definitely subordinated to the national union. From the
standpoint of the stronger national unions the city federations are
merely the means of making more effective the boycott, of carrying
on the propaganda for the union label, and of taking such political
action as the needs of the labor movement may require. The less
centralized national unions would be willing to make the city feder-
ations more important. Particularly is this true of many of the
unions in the building trades. There is, therefore, occasionally some
division of opinion among the national unions in the Federation as to
the proper functions of the city federations, but every increase in
the centralization of the national union has contributed to the senti-
ment in favor of the subordination of the city federation.
IV
The fourth form of organization, the federation of unions of allied
trades, is of recent origin. Local councils were formed in the building
trades as early as 1865 and in the printing trades in 1886. Councils
1 Proceedings of the American Federation of Labor, 1904, p. 234.
2W. 1898, pp. 68, 144. s/(i, igo6_ p 245.
THE NATIONAL UNION 401
have also been formed in the metal trades, among the railroad unions,
and among the maritime trades.^ It will be sufficient for our present
purpose to describe the development which has taken place in the
relation of the national unions of the building trades to the local and
national building trades councils, since in these trades the activities
of the councils have been preeminently of such a kind as to cause the
national unions concern.
The local building trades councils have been an important factor
in industrial disputes. They have systematically employed the sym-
pathetic strike and have ordinarily maintained jointly the closed
shop. For many years their activities were unsupervised by any
national authority. In 1897 a considerable number of local building
trades councils formed a national organization known as the Inter-
national Building Trades Council. In 1903 it comprised seven national
unions and seventy-six building trades councils. The affiliated na-
tional unions were, for the most part, small unions, since the larger
unions were from the outset strongly opposed to the International
Building Trades Council. In the annual convention of that body
each local council originally was entitled to one vote for each trade
in the council. A single local council might, therefore, cast ten
or fifteen votes, but a national union was allowed only a single
vote. In 1904 and 1905 changes were made in the constitution
with a view to giving the national unions greater weight in the
conventions, but the national unions were far from satisfied. In
1903 a few of the larger national unions in the building trades or-
ganized the Structural Building Trades Alliance. The convention of
the Alliance was composed exclusively of delegates from national
unions. The organization of the Alliance greatly weakened the Inter-
national Council, and for some years the latter has been unimportant.
The Structural Building Trades Alliance was transformed in 1908
into the Building Trades Department of the American Federation of
Labor.
The annual convention of the Building Trades Department, the
final authority in its system of government, is composed of delegates
from the affiliated national unions. Attempts have been made from
time to time to secure the admission of delegates from the local
councils, but these attempts have always failed. In 1909 delegates
1 Kirk, National Labor Federations in the United States, pp. 80-88.
402 TRADE UNIONISM AND LABOR PROBLEMS
from certain councils were allowed the privilege of participating in
the discussion but not the right to vote. In 1910 the convention re-
fused to admit delegates from local councils.^
The Building Trades Department has not been very successful
as yet in bringing the local councils under control, but a brief survey
of its efforts will indicate the points at which the national unions de-
sire to curb the activities of the local councils.
The national unions have been particularly desirous of putting
an end to the encouragement given to demarcation disputes by the
councils. Until the formation of the Department a council was
entirely at liberty to recognize the claim of either of two contending
unions to a particular class of work. They might, for instance, expel
the local union of Stone Cutters on complaint of the Granite Cutters
and thus lend their aid to a particular adjudication of the question
of jurisdiction. When one considers that there are over two hundred
building trades councils in the United States, and that their decisions
are given in view of local conditions and not infrequently are the
result of coalitions among the various local unions which have juris-
dictional disputes, the resulting confusion can be readily conceived.
From the time of its organization the Department has endeavored
to establish the principle that a local council has no power to de-
cide a demarcation dispute. In 1909 the executive council of the
Department in its report to the convention said :
Your Executive Council has taken the position that jurisdiction
lines are laid down by International organizations, and as such they
can only be altered, amended, or waived by duly accredited repre-
sentatives appointed by each International union acting in a general
way, and thereafter such amendments, changes, or conditions must
be ratified by the Executive Committees of the Internationals in
interest.^
At the session of the Department in 1908, when the old controversy
of the Plumbers and the Steam Fitters came up, Mr. Duffy, secretary
of the United Brotherhood of Carpenters and Joiners and a delegate
from that union to the convention of the Department, said:
I believe every organization represented here has had men involved
in strikes with Plumbers on one side and Steam Fitters on the other.
Now we are coming down flat-footed to tell you that the Central
1 Proceedings of the Building Trades Department, 1910, p. 96.
2/(i. igoQ, p. 36.
THE NATIONAL UNION 403
Bodies and the local unions affiliated with them must not take any
part in the future in these fights that may arise over jurisdiction.
. . . We not only say must, but you are ordered by this convention
to come together.^
On numerous occasions the executive council of the Department
has forced local councils to readmit local unions of affiliated national
unions which had been expelled on account of demarcation disputes.''
Before the establishment of the Department local councils fre-
quently admitted to membership local unions which were independent
of any national union and local unions affiliated with national unions
which were rivals of recognized national unions. Countenance and
encouragement were thus given to the formation of independent and
"dual" organizations. In the building trades, because of the local
character of the industry, such independent and "dual" unions have
been easily formed and in some cases have flourished for many years.
The executive council of the Department decided in 1908 that local
councils might admit to membership local unions of national unions
not affiliated with the Department, but only if the " claims of juris-
diction in no way conflicted with the locals of any affiliated union,"
and this decision was affirmed by the convention.'* In 1909 the
Newark Building Trades Council was forced to unseat the delegates
of "dual" unions of Tile Layers and Hod Carriers. In the same
year the president of the Department reported that the number of
independent unions of Hod Carriers was so large that the national
union should be reorganized under the auspices of the Department,
and this was finally accomplished in 1910.* A year later local coun-
cils were ordered to unseat delegates of the "dual" local unions of
Electrical Workers.^
The national unions in the building trades have not attempted to
bring the local councils under control to any considerable extent ex-
cept with reference to the admission and exclusion of local unions.
It was provided in 1899 that local unions when making a demand
for an increase of wages or a reduction of hours must secure the
approval of their national unions as well as of the council. But the
constitution of the Department from the outset has set forth that
1 Proceedings of the Building Trades Department, 1908, p. 68.
^Ibid. pp. 9, 16. ^Id. 1909, pp. 65-70; .1910, pp. 30-32.
^Id. 1908, p. 35 ; 1909, p. 124. ^Id. 1910, p. 90.
464 TRADE UNIONISM ANt) LAbOR PROBLEMS
no local union affiliated with a council may strike without the consent
bf the council. Moreover, not only have the national unions been
fcontent to permit the local councils to order sympathetic strikes, but
ifl order to facilitate such strikes provision has been made since 1909
in the constitution of the Department that local unions must not
enter into agreements which will prevent their "giving each other
prompt and effective assistance or their combining for united action
and material support."^ Where councils have ordered local unions
to strike and expelled them for failure to do so, the Department has
refused to require their reinstatement.^ The willingness of the na-
tional unions in the building trades to allow local councils to order
out the members of local unions on strike is explicable by the fact
that the trade-unions in the building trades are far less centralized
than in most other trades.
The Department has not been able as yet to enforce effectively
even those of its rules relating to jurisdictional disputes and inde-
pendent unions. The control of the councils by the Department is
accomplished, to the extent that it is accomplished, by pressure on
the local unions exerted througli the national unions with which they
are affiliated. If a local council refuses to obey the rules of the
Department and its charter is revoked, a part or all of the local unions
may form an independent council. The national unions cannot be
uniformly depended upon in such cases to prevent their local unions
from joining such independent councils. The officers of the Depart-
ment have proceeded with great caution in enforcing the rules in
order to avoid, as far as possible, the formation of "dual" councils.
In his report to the convention of the Building Trades Department
in 191 1 President Short said:
In the case of local councils who saw fit to disobey the mandates^
of the St. Louis Convention, they were refused any further recogni-
tion by the Department in so far as information or the obtaining
of supplies etc. was concerned, and charters in various centers
would have been revoked had it not been for the fact that it would
1 Proceedings of the Building Trades Department, igog, p. 64.
^Ibid. p. 38.
3 The "mandates" here referred to were the decisions by the convention
of 1911 that local councils should expel the delegates of local unions of
Carpenters and Steam Fitters, since these national unions had refused to accept
the rulings of the Department with reference to their jurisdictional claims.
THE NATIONAL UNION 40S
have worked serious injury to innocent parties, by that I mean or-
ganizations who were loyal to the Department. It would have been
necessary, had charters been revoked, to immediately proceed to
organize new councils, with the absolute certainty that some of the
organizations would have continued in the old council, thus dividing
the strength of the Building Mechanics in such centers as new councils
were instituted ; as witnessed in the case of the St. Louis Building
Trades, where we have organized a new council under the laws of
the Department and there still remains a portion of the old council
who refuse to obey the laws of the Department.'^
Obviously the control exercised by the Department over the local
councils can never be effective until the national unions are willing
and able to force their local unions to refrain from opposing the
councils established by the Department. This result is not likely to
be accomplished in the near future. In the first place, the national
unions in the building trades have relatively decentralized govern-
ments and correspondingly small power over their local unions.
Secondly, the national unions are not infrequently reluctant to abide
by particular rules of the Department, although they favor the
exercise of power in that field by the Department.
In the period since 1897, then, the national union has retained and
made more secure its control of the national federation ; it has
limited in important respects the powers of the city federations ;
and finally, it has taken the first tentative steps in the control of
the allied-trades councils. In no other period of American trade-
union history has the dominance of one of the forms of trade-union
grouping been so clearly the ruling principle in the structure of Amer-
ican labor organization. The complete subordination of the city
federations and of the allied-trades councils is probable, since the
increasing centralization of the larger and more powerful national
unions leads them more and more to oppose any interference by
local organizations.
George E. Barnett
Johns Hopkins University
1 Proceedings of the Building Trades Department, 1911, p. 36.
XXVIII
THE NATIONAL FOUNDERS' ASSOCIATION^
EMPLOYERS' associations in the United States formed for the
purpose of dealing with or opposing organized bodies of work-
men are of comparatively recent origin, but in the last fifteen years
they have become a factor in industrial relations which is not to be
ignored. Each December the Stove Founders' National Defense
Association and the Iron Molders' Union hold a conference at which
are determined wages and conditions of employment in the stove
foundries for the succeeding year ; the glass manufacturers meet
representatives of the several glassworkers' unions annually; the
coal operators in the Southern and Southwestern coal fields have a
series of written agreements with the United Mine Workers of
America. In these and several other industries which might be men-
tioned the system of collective bargaining developed -between the
manufacturers and their men has resulted in the maintenance of a
permanent industrial peace.
On the other hand, a nUmber of organizations of employers exist
almost exclusively for the purpose of resisting collective bargaining
and recognition of the unions, on the theory that where the complete
autocracy of the employer is preserved the interests of all are better
cared for than under any scheme of industrial democracy yet devised.
Nor has this conclusion been reached by purely deductive reasoning
on the part of those who take this position. One of the most signifi-
cant features of their program is that it is based upon a wealth of
experience, for of the employers' associations active in opposing the
advance of the unions some of the most important are those which
have attempted to operate under agreements with organizations of
their men and after affording the system a trial have found it un-
suited to their needs and unadaptable to their industries. This is
true of the National Metal Trades Association, which now refuses to
^From Quarterly Journal of Economics, Vol. XXX (1916), pp. 3S2-386.
406
NATIONAL FOUNDERS' ASSOCIATION 407
deal with the Machinists' Union ; of the National Erectors' Associa-
tion, which will no longer countenance the International Association
of Bridge and Structural Iron Workers ; of the National Founders'
Association as regards the Iron Holders' Union. In addition, the
influence of these failures has spread to nontrade organizations of
employers such as the Anti-Boycott Association, the National Asso-
ciation of Manufacturers, and the Citizens' Alliances, which have in-
corporated in their policies a definite defense against union aggressions
of every kind.
The oldest and in some ways the most interesting of these now
hostile trade organizations of employers is the National Founders'
Association, whose membership comprises nearly five hundred manu-
facturers of cast-iron specialties in the United States and Canada,
employing approximately one eighth of all the molders and core-
makers in the country and producing a considerable proportion of
the output of heavy machinery and lighter iron castings. The story
of this organization's struggle with the Iron Molders' Union must
always be an important chapter in the history of the American labor
movement. Formed in 1898 for the distinct purpose of substituting
for the prevailing industrial war a policy of cooperation with the
Union, as had been so successfully done by the employers in the
stove branch of the foundry trade, the National Founders' Asso-
ciation the next year entered with enthusiasm into an agreement with
the Union to arbitrate^ disputes and thus do away with strikes and
the other annoyances characteristic of a union-dominated industry.
But as the months went by, this instrument designed for peace seemed
to bring only an increase of trouble. Misunderstandings as to its
purpose and the method of its operation, combined with actual if not
especially glaring violations of its terms on the part of both organi-
zations, soon served to bring about great dissatisfaction. Yet for
nearly six years the prescribed form of negotiations was gone through,
and an honest effort was made by Association and Union to reach a
^The word "arbitration" as applied to the settling of labor disputes was
originally used to designate all forms of conferences between employers and
employees. In the case of the Iron Molders' agreements with both the Stove
Founders' National Defense Association and the National Founders' Association
the system required pure conciliation, the board being composed of an equal
number from each side with no provision whatever for real arbitration involv-
ing the calling in of an odd man.
4o8 TRADE UNIONISM AND LABOR PROBLEMS
mutually acceptable method of procedure. When at last it became
clear that there was no ground on which both could meet, the Asso-
ciation abrogated the agreement and attempts at collective bargaining
were abandoned.
It was perhaps unfortunate that relations with the Union were
undertaken by the National Founders' Association before its funda-
mental law and administrative machinery were fully competent to
handle the problems this relationship entailed, but in developing
the technic as well as the policy of the Association to its present high
standard of efficiency the experience with the Union played an im-
portant part. As will appear in the following pages, it was not until
1904 and the abrogation of the agreement that the policy of the
Association was firmly established and the governmental, financial,
and defense systems completely worked out. Since that time no
change worth mentioning has been made in either structure or
method, and the Association today is practically what its intercourse
with the Iron Molders' Union has made it. It is the purpose of the
present paper to describe its structural evolution, but in presenting
the facts as to the development of its procedural mechanism no
attempt has been made to pass judgment upon the justice of the
position it has assumed or the principles for which it stands.
The objects of the National Founders' Association as stated in the
constitution are
ist — The adoption of a uniform basis for just and equitable deal-
ings between the members and their employees whereby the interests
of both will be properly protected.
2d — The investigation and adjustment by proper officers of the As-
sociation, of questions arising between members and their employees.
This purpose has never changed in the seventeen years of the As-
sociation's existence, but the means by which it is to be accomplished
have altered considerably.
At first there was no definitely, expressed policy beyond a deter-
mination to band together the foundrymen of the country for the
purpose of ridding themselves of many of the working conditions
which long years of effective unionism had established in their shops
and of preventing further encroachments from that source. In place
of union rules as the controlling force in fixing shop conditions,
it was desired to establish those "general principles of freedom to
NATIONAL FOUNDERS' ASSOCIATION 409
employers in the management of their works" recognition of which
the British manufacturers in the industry had just obtained in an
agreement with their men. Nothing in this, however, implied any
intent to crush the Union. Indeed, there was no hostility on the em-
ployers' part except to those practices which it was believed had proved
detrimental to their employees as well as themselves. Could these
be eliminated and the good which was known to inhere in organized
action be molded to the employers' ends, it was thought the workmen
and the industry would both benefit.^
The model of procedure first followed was that used by the Stove
Founders' National Defense Association, whose constitution was in
many parts copied almost verbatim and. whose policy of agreements
with the Union served as the inspiration for the newer organization's
attempt to reach a satisfactory system of collective bargaining. But
these were no sooner tried than they proved in some rather serious
ways to bfe unsuitable. The constitutional misfits were remedied as
the need became apparent ; the difficulties with the Union were much
more fundamental. It was soon discovered that the freedom from
labor troubles which the Stove Founders had secured through their
agreement had been purchased at the price of surrendering a con-
siderable share of the control of the industry, that instead of shaking
off union rules and a never-before-recognized participation in shop
management, agreement had come to mean in the stove foundries
legitimatized copartnership of authority and administration.
Such a system the National Founders' Association had never con-
templated, nor were its leaders convinced that conciliation necessarily
implied such a yielding to the Union as the stove men had granted,
with what they considered to be so little given in return. During the
years of bargaining which followed there was evident on the part of
the Association a willingness to make certain concessions to the Union
1 Proceedings of the Meeting of the Foundrymen, New York, January 26,
1898; William H. Pfahlcr, History of the National Founders' Association
(MS.) ; Proceedings of the Conference between the National Founders' Asso-
ciation and the Iron Molders' Union of North America, New York, March 8,
1899 (MS.), pp. S-6; Proceedings of the National Founders' Association,
Buffalo, February i, 1899, p. 4; id. Niagara Falls, August 9, 1899, pp. 41, 45; id.
New York, November 13, 1901 (MS.), pp. 76, 128; id. Washington, November
II, 1903, p. S; id. Cincinnati, November 16, 1904, in the Review, December,
1904, pp. 7-8, 36; National Founders' Association Confidential Circular No. 6.
410 TRADE UNIONISM AND LABOR PROBLEMS
if its members were to receive commensurate benefits. But all at-
tempts to reach a mutually acceptable set of working rules were
balked by the Union's inability to give up or modify any part of
its fundamental law. This attitude on the part of the Union may
not have been without some justification, but the fact remains that
the original plasticity of the Association's policy gave way gradually
to a rigidity which made it as unarbitrable and unsusceptible of com-
promise as that of the Union, and whereas in 1900 the cardinal prin-
ciples according to which the Association desired to operate were
presented mainly as a suggestion of certain features to be embodied
in an agreement, since 1904 they have served as an ultimatum
whenever Association and Union have come in conflict.
Briefly summarized, the Association's outline of policy declares
against union restriction of output, union limitation of the earning
capacity of the employee, union hmitation on the employment of
apprentices, union imposition of fines and restrictions upon work-
men. It is in favor of a fair day's pay for a fair day's work, the right
of the employer to hire whomsoever he sees fit without regard to
union affiliation, the operation of molding-machines and approved
appliances without restriction, the education of the American boy
in the trade of molding without union interference. Instead of repre-
senting its members in a collective capacity to negotiate with their
men for the terms of employment, the Association has become in
reality a mutual insurance organization whose members are protected
against the excessive demands of the Union and receive aid in
upholding in their shops the principles for which the Association
stands.
Although the original law of the Association, combined with the
almost immediate ratification of the agreement with the Union, made
ample provision for the elimination of cessations in the industry
through the use of conciliation in the settlement of disputes, the
Association was so organized that it could fight if occasion required,
and, in spite of all efforts to maintain peace, recourse to active de-
fense measures was frequently thought to be necessary. When rela-
tions with the Union were broken off entirely, although the Association
continued to indorse the principle of employer and employee getting
together to talk over disagreements, its protective work was still
further developed and systematized.
NATIONAL FOUNDERS' ASSOCIATION 411
The by-laws have always stipulated that when a member had a
dispute with his employees which neither he nor representatives of
the Association could settle and in which the latter believed he should
receive support, he might be defended in one of three ways : first,
by procuring men for him who would take the place of the strikers ;
second, by affording him compensation for loss of production ; third,
by making such work as he might require.
In practice, securing molders to take the place of strikers has been
the method of defense most generally used. Very early the plan was
devised of issuing to those men who had been faithful to their em-
ployers in time of labor troubles a "card," or certificate of loyalty,
which was to secure for them the special consideration of all members
and which at the same time made available for the Association a
somewhat permanent force of strike breakers. The cards were ac-
cepted by the men with the understanding that they were issued by
the Association and remained the property of the Association, to be
revoked and recalled at pleasure upon evidence of breach of faith on
the part of the holder. Whenever a man took employment with an
Association member he deposited his card with his employer to be
returned to him at the termination of his contract if his, service had
been satisfactory, or turned over to the secretary of the Association
with a statement of the circumstances for investigation in case his
conduct had not been such as befitted the bearer of such a recom-
mendation. It was not intended that card men should remain in
the foundries of members as permanent employees, but should be
used simply to break a strike and then be moved on when the trouble
was over and the regular force returned. In the two big strikes which
were handled with this system of defense, 75 per cent of the strike
breakers used in the second were card men who had been employed
in the first,'^ which would seem to indicate that the men were pleased
with the arrangement and that for the Association it provided a
means of getting molders much more satisfactory than the usually-
resorted-to newspaper advertisements and employment agencies.
It is not known exactly how many of these cards were issued. The
first were given out during the Cleveland strike of 1900, and in the
following May, immediately after the settlement of that dispute, it
was reported that 221 were held by men who had worked for the
1 Report of the Secretary, N. F. A., November, 1901 (MS.) , p. 30.
412 TRADE UNIONISM AND LABOR PROBLEMS
Association at least sixty days.^ By November, 1902, the number
had increased to 431.^ Although the practice of issuing cards was
continued for some time longer, it is probable that not many more
than this were given out, perhaps 500 in all.
Besides receiving the cards, the men who were used to break strikes
were guaranteed a "bonus" of at least $1 a day in addition to the
wages paid by the individual employer in whose shop they worked.
This bonus was paid from the reserve fund of the Association as a
"strike benefit" in recognition of the great inconvenience, social
ostracism, and perhaps even personal danger to which every strike
breaker is known to be more or less liable. Loam molders in Cleve-
land received a bonus of $4, and it is probable that some men earned
$7 and more a day at that time.^
The cost of this card-and-bonus system was thought to be, on the
whole, less than that of any other method of combating labor troubles.
In the Cleveland strike, which lasted seven and a half months and
required the importation of 610 men who worked one day or more,
the total cost to the Association was $142,604.52, divided as follows :
Administrative council $2,899.37
Office expense 5,649.51
Procuring molders 7,153.42
Delivering molders 6,199.39
Compensation to foundries 31,175.25
Bonus to molders 79i7°S-53
Detective service 4,476.98
Miscellaneous expense 793-65
Expense of riot, September 29, 1900 854.04
Legal services 415.00
Expense of boarding men out 3,282.38
The cost of procuring and delivering molders alone was $2 1 .8g per
molder.* In subsequent struggles this item was materially reduced
because of the systematic use of card indexes and other devices for
keeping in touch with the men once found, which made getting strike
breakers at another time an easier matter than had been the assem-
bling of the group in the first place. Thus the total expense to the
1 Report of the Secretary, N. F. A., May, 1901 (MS.), p. 13.
2 Proceedings, N. F.A., Detroit, November 19, igo2 (MS.), p. 20.
3 Report of the Secretary, N.F.A., November, 1900 (MS.).
* Id. May, 1901 (MS.), pp. 7-9.
NATIONAL FOUNDERS' ASSOCIATION 413
Association of the Chicago strike of 1901-1902, which lasted thirteen
months, was only $47,582.33. Here 440 men who worked one day
or more were supplied at an average cost of only $6.28 per man, the
total saving per man per day worked being 117 per cent of the cost
of the same item in Cleveland the year before.^ In 1903 the total
cost of supporting twenty-three members whose 853 men had gone
out was only $46,238.91.^
This method of fighting strikes was fairly satisfactory so long as
it was expected the strike breakers would be used only as a temporary
lever to bring to terms Union members who would eventually be
taken back. But there were several circumstances in connection
with the use of the cards which made them open to abuse, and, more-
over, the system left the members of the Association as dependent
as ever upon the Iron Molders' Union for the maintenance of a
trained and permanent labor force. This situation was recognized as
early as 1901.^ But it was not until the break with the Union several
years later and the establishment of a nonunion policy that it became
positively necessary to provide for a member having trouble with
his molders a crew of independent men who would permanently
operate his foundry. To attain this end there are now employed under
yearly contract a number of mechanics skilled in the trade of molding
and coremaking who are placed in the shops of members in periods
of labor troubles to act as instructors in breaking in and training new
sets of men. These operatives are in no sense strike breakers, for
from the moment the union men go out the Union is completely
ignored, and the Association is concerned not with breaking the strike
but with making the most of the opportunity afforded by the walkout
to start up again on an independent and nonunion basis. As rapidly
as the shop assumes normal conditions the contract molders are
turned back to the Association and transferred elsewhere. By the
terms of their contract they are to go wherever they are sent, their
railroad fare is paid, and they lose no time because of the traveling.
All men employed through the Association to assist one of its
members in making his foundry independent of the Union are en-
gaged either under this yearly contract or under one which is very
1 Proceedings, N. F. A., Detroit, November 19, 1902 (MS.), p. 15.
2 Id. Washington, November 11, 1903, p. 12.
3 Report of the President, N.F.A., November, 1901 (MS.), p. 14.
414 TRADE UNIONISM AND LABOR PROBLEMS
similar to it but is to run only sixty days. They are guaranteed
wages varying from $4 to $5 a day for dajnvork, depending upon
skill. In some cases the men arrange with the firms to which they
are assigned, to work piece or premium plan, and earn in this way
sums considerably in excess of the guaranteed day rate. It is said
that the labor bureaus run by the Association have been in oper-
ation so long, and that the Association is so well and favorably
known among the independent molders and coremakers of the country
because of its fair dealings, that the bureaus are constantly in touch
with men seeking work and can readily supply from time to time
whatever labor is needed by the members. The number of men under
yearly contract varies with the industrial conditions prevailing. Their
contracts expire at different times of the year, and adjustment of
supply to demand is therefore easy. When labor troubles have been
few, not many will be thus engaged, but the sixty-day-agreement men
supplement the others so nicely that practically any foundry can be
adequately manned on twenty-four hours' notice.
When a member's support is to consist of the establishment of a
new labor force in his foundry, the Association men are shipped to
him and turned over to his control. Men who are to be trained are
engaged, being often persons previously employed as laborers and at
unskilled work in the shop. Machines are installed, specialized jobs
are planned, piecework and other schemes for encouraging men to
large output are introduced, and in a short time the foundry is in
full operation with a new lot of men, improved appliances, and
freedom from union rules and regulations.
Occasionally a condition may arise where it becomes necessary or
desirable for one member to lend some of his men to another who is
involved in a strike. This was sometimes done in the days before
the present large supply of nonunion men had been made available,
but the commissioner reports that it is a practice to which recourse
is now seldom had. Other methods of defense provided for in the
by-laws are also used but little, although they may at times supple-
ment the customary method. To send struck work out to be made
has been found very likely to bring on sympathetic strikes in the
foundries to which it goes. To pay compensation for idle floors is
readily seen to be only a last resort. Compared with the system of
breaking in a crew of nonunion molders for permanent employment
NATIONAL FOUNDERS' ASSOCIATION 415
these latter plans present mere palliatives, for until a body of inde-
pendent men has been assembled and trained in any foundry an
employer is as much at the mercy of the Union as ever and has not
succeeded in ridding himself of the causes which were usually instru-
mental in bringing on the trouble in the first place.
For administrative purposes the Association is divided into dis-
tricts on geographical lines. In each district is a district committee
of five members elected by the Association from names suggested by
the members in the district, and an attempt is made to make these
as representative as possible of the various localities and foundry in-
terests. Each district committee chooses its own chairman and "vice
chairman, who constitute with the president, vice president, and treas-
urer of the Association (unless as at present the last named is a
banking institution) an administrative council. For all practical
purposes, as regards formulation and carrying out of policy, this
body is supreme, except that the constitution can be changed only
by favorable action of two thirds of the members; and such other
matters, as make an expression of opinion from all desirable are
referred to their consideration.
From the very nature of the organization the main function of the
administrative council has been the settlement and prevention of
labor difficulties. At first the president and the district committees
endeavored to adjust the constantly arising disputes without the serv-
ices of any single person whose entire attention could be devoted to
this work. Every time a member had a grievance with his employees,
BO matter how trivial, which the two parties could not settle among
themselves word was sent to the proper district committee. This
had to meet within three days at the foundry of the complaining
member, decide on the merits of his controversy, and if it appeared
he was in the right, arrange for such support as they were willing
to allow in case the Union pressed the issue. It was also found neces-
sary to convene the entire council in a number of sessions a year.
Thus the time and effort required for Association affairs on the part
of busy men was so great as to involve serious neglect of their own
interests. Few could afford to take responsible offices, and those who
did serve felt obliged to limit their terms to one year. The member-
ship of the administrative council and district committees was
therefore constantly changing.
41 6 TRADE UNIONISM AND LABOR PROBLEMS
In an effort to make the burden of leadership less heavy the salaried
office of commissioner was created in 1901 for the purpose of giving
one man charge of the details of settling labor troubles and carrying
on the executive work of the Association. This has greatly relieved
the district committees as well as the president, for they are not
called in now until all preliminary investigations have been made by
the commissioner. When he believes a strike cannot be averted, the
committee meet to decide whether or not they will grant support.
In 1906 the president was allowed a salary for such a part of his
time as the growing administrative work of the Association required.
The 'result of these changes has been a greater permanence in the
offices and a higher degree of efficiency all around. An adequate office
and field force of experts, with headquarters in Chicago, New York,
and Buffalo, handle the work of the Association. It has become an
exceedingly effective business machine, although much of the per-
sonal interest and relationship which prevailed when the group was
smaller has necessarily been lost.
In order to obtain the Association's support in time of strike, a
definite procedure is rigorously exacted of all members. Experience
has proved that anything short of this is sure to involve endless
misunderstandings and other complications of a more serious nature.
Before the defense work was thoroughly systematized there were
many disagreements as to the amount of compensation and the cir-
cumstances under which it would be paid. Members took action and
contracted expenses without authority from officers, council, or dis-
trict committees, and expected the Association to get them out of
whatever further difficulties this involved them in with their molders
and to reimburse them for all expenditures. When this was refused,
hard feeling, resignations, and lawsuits followed. In 1904, in the
general reorganization of the Association's affairs, the protective sys-
tem was put on its present well-defined basis, and it was distinctly
understood that thereafter all claims would be thrown out entirely if
procedure had not been according to the letter of the by-laws.
A member having trouble with his men is required to notify the
commissioner at once, in writing, giving the full details of the case.
An immediate investigation is then made, and if possible the breach
is patched up. This failing, the district committee is called together
to determine whether or not the aggrieved member's cause is just,
NATIONAL FOUNDERS' ASSOCIATION 417
and the findings are reported to the administrative council, with whom
rests the final decision as to the granting of support, its nature, and
amount. By asking the Association's aid the member places the
matter entirely in its hands and binds himself to carry out any decree
of the council or of those acting under its authority, and pending the
decision he can make no settlement nor discharge his men without
the consent of the council. In case support is granted it may be in
any one or more of the three ways already mentioned, provided that
the supplying of men or the making of work in another shop shall
not be undertaken without the consent of the member. It is further
understood, and now included in the by-laws, that in procuring mold-
ers, having the work done, or giving a money compensation to the
amount of two dollars per man per day, this shall be only to the
extent of 70 per cent of the men usually employed or the work
produced as evidenced by the last quarterly report.
The method of defense having been decided upon, an agreement for
support is entered into between the member and the Association, in
which the latter undertakes to assist and support the member for a
reasonable period, this -aid to be determined by the administrative
council, who may reduce it from time to time or discontinue it entirely.
The member' in return agrees that the aid given is to be considered as
the complete satisfaction of all claims on the Association because of or
on account of the prevailing strike, agrees not to make any terms with
the strikers or their union representatives without the written consent
of the council, agrees to provide at all times adequate police protection
for the men furnished, and to absolve the Association from all respon-
sibility for any industrial accidents which may occur. Finally, the
member agrees that for a period of one year following the satisfactory
adjustment of the trouble he will conduct his foundry strictly on the
"open shop" plan.
The support of the Association is by no rneans given every time it
is requested, and in no case is a member entitled to aid until he has
been in the organization at least two months. The council in its
discretion may refuse help where the member has failed to advise
the commissioner promptly of the existence and nature of the trouble
or when he has declined to comply with the advice of the president
or commissioner. But having acted in accord with the Association's
rules in all respects, a member can expect to be supported in any
41 8 TRADE UNIONISM AND LABOR PROBLEkiS
attempt to enforce those principles for which it stands, as enumerated in
the outline of policy. In other matters the granting of aid will depend
upon the issue involved and the justice of the member's position.
For the year ending November i, 19 13, the support of the Asso-
ciation was granted in thirty-two shops. As understood and classified
by the Association the issues involved were
Refusal to work with nonunion men 2
Attempt to organize and force closed union shops . . . .11
Control of molding machines I
Elimination of differential wage rate i
Refusal to discharge certain men for nonpayment of special
assessments levied by the Union I
Demand for strictly closed union shop 3
Demand for closed union shop and reinstatement of men
discharged for cause i
Demand for minimum wage and closed union shop condi-
tions 8
Apprentice ratio I
Objection to employment' of handymen i
No demands ; pickets from other shops on strike intimi-
dated workmen until they refused to work . . . . . I
Objection to piecework and refusal to work with nonunion
men i
It is obvious, of course, that the cause assigned by the employer
in any dispute may be quite different from that mentioned by the
men, and that often these causes are so interrelated as to make a
singling out of any one utterly impossible. But from the above tabu-
lation it appears that, at any rate in the employers' view, the main-
tenance of Association principles against the attack of the Union
is the fundamental reason for the conflicts in support of which the
Association lends its aid. Even if other factors are taken into ac-
count, the causes assigned by the Association must be considered to
be the ones it believes the most important.
The Association by-laws have always required that during the
existence of a boycott against the goods made by any member none
of the men originating the boycott should be countenanced until the
boycott was removed. In recent years, since the anti-injunction prop-
aganda of the unions has become so important, the administrative
council of the Association has voted in individual cases to support
NATIONAL FOUNDERS' ASSOCIATION 419
members in their fights to have injunctions against the boycott and
other union practices sustained.
From the formation of the Association the attitude of a foundry-
man toward trade-unionism has in no way affected his admission to
membership. He can recognize the Union or not, as he pleases. For
although the Association as a body is definitely committed to the
open-shop policy, there is no requirement that each member shall run
an open or nonunion shop,' nor, indeed, is a member obliged to con-
form to the outline of policy in all respects. If certain circumstances
make it appear to an employer that he will be advantaged by signing
an agreement with the Union, he is entirely free to do so. The one
exception is that already noted : after having put his foundry on an
open-shop basis through the aid of the Association when he was
having difficulties with the Union, he must retain this condition for
at least a year. During the period of the agreement with the Iron
Molders' Union about 90 per cent of the Association's shops making
heavy machinery were union and 80 per cent of the agricultural and
malleable shops were open.^ At the present time 85 per cent of the
members run open shops .^
Membership in the National Founders' Association is limited to
"persons, firms, or corporations engaged as principals in and opera-
tors of foundries where castings in iron, steel, brass, or other metals
are made." There was a tacit understanding at the beginning that
no foundryman would be admitted who was eligible for the Stove
Founders' National Defense Association; and in practice members
who made castings in any respect similar to those made by members
of the latter organization were supposed to be guided in their pro-
cedure with their molders as far as possible by the Stove Founders'
agreements. In the last few years, however, due to a growing dis-
similarity of policy of the two associations, this practice has not been
observed, and a number of stove manufacturers who find their
attitude toward labor unions more adequately expressed in the Na-
tional Founders' Association than in the Stove Founders' have been
admitted to the former.
1 Proceedings, Conference, Detroit, November 9, 1899 (MS.), pp. 12, 13;
Proceedings, N. F. A., New York, November 13, 1901 (MS.), p. 85.
2 Hearings before the United States Commission on Industrial Relations,
Washington, April 7, 1914 (MS.), Vol. I, pp. 242-243, 245, 246, 248, 251,
420 TRADE UNIONISM AND LABOR PROBLEMS
In 1900 the first classification of members was made on the basis
of work produced in their shops.^ The results were as follows :
Agricultural 24
Architectural 9
Brass and bronze • • 4
Engines — electrical, mining, and new machinery . . . 77
Furnaces and heating 10
General foundry work ■ 143
Light-gray iron 33
Machine tools, etc. . 8
Malleable 29
Pumps, valves, hydrants, pipe 18
Steel 10
By comparing the total thus represented (365) with the member-
ship of the Association (275) at the time, it is evident that a number
of firms were making two or more kinds of castings. At present a
page selected at random in the published directory of members shows
one making "structural, engine, and railroad castings, sash weights,
castings for brick and butter-tub machinery, general work"; another,
"general jobbing, automobile and gray-iron castings"; still another,
"air compressors, steam pumps, duplex engine governors"; which
list might be continued indefinitely.
During the first few years tremendous efforts were made to increase
the membership of the Association. No method of selection was
used and bad risks frequently were taken. Not only did some em-
ployers who were notorious for always having strikes in their shops
gain admission and demand protection, but members refused to pay
their assessments, refused to obey the rulings of the council, and
in other ways caused the Association much trouble and expense.
There was, of course, a natural tendency for concerns not to value
membership very highly until they were threatened with an insurrec-
tion of their employees, and they would then seek protection in the
Association, often only to resign when the difficulty was settled. The
membership was far from stable, and in some years more resigned
than were admitted.
1 Proceedings, ^f. F. A., Detroit, February i, 1900, p. 29 ; N. F. A., Confidential
Circular No. 26; N. F, A. Handbook, May, 1900.
NATIONAL FOUNDERS' ASSOCIATION 421
For a time the law of the Association provided that "no person,
firm, or corporation shall be elected to membership who shall be
engaged in a strike," but in practice this rule was frequently waived,
and employers whose molders had actually walked out were admitted
and gained protection. In many cases, by pursuing the policy of
defending such a firm, a further extension of the trouble was pre-
vented, and the welfare of the Association was better conserved than
would have been the case had the struck shop been denied help and
been forced to yield to the Union's demands, since such concessions
would inevitably have spread to other foundries in the same locaUty.
The by-laws were therefore changed to conform to practice, and a
"probationary membership" was created to take care of those
foundrymen who wished to join during a strike. The administrative
council may, after investigation and careful consideration, by a two-
thirds vote advance a probationer to full membership if it seems to
be to the interest of the Association to do so. While on probation the
member pays all the fees and assessments of a regular member but
receives no financial benefit. Members are not allowed to resign while
they are in the midst of a strike or pending the settlement of a dispute,
unless by special consent of the council ; and in any event four
weeks' notice must be given and all obligations to the Association be
paid in full. A member who has resigned may be reinstated by the
council upon payment of a sum equal to all the assessments he would
have paid had his membership continued without interruption.
In the last ten years great care has been exercised in the selection
of members, for it has been clearly demonstrated that the Associa-
tion's strength does not lie in numbers alone. In an effort to include
only the best firms in the industry every application for membership
is carefully investigated before it goes to the administrative council.
A personal visit to the foundry is made by one of the officers, and the
firm's financial standing and general reputation is looked into. It is
the intention to keep out such concerns as will be a constant source
of expense or may in other ways prove undesirable. If the prelim-
inary investigation shows the firm to be running an up-to-date plant,
treating its employees in an honorable manner, and having an ade-
quate financial backing, its name is approved by a two-thirds vote
of the administrative council and is then sent to every member to
be voted on. Unless ten protests to admission are received, election
422 TRADE UNIONISM AND LABOR PROBLEMS
is complete. Objections raised by other members in the district
where the applicant is located may occasionally keep a foundryman
out, but for the most part the procedure is purely routine.
Although members of the National Founders' Association employ
about one eighth of all the molders and coremakers in the country,^
their importance in the industry is probably considerably greater
than this would seem to indicate, because labor-saving devices not
often used in other foundries have made possible in Association shops
the employment of fewer men in proportion to the value of the out-
put than is the general average. The foundries vary in size from
small jobbing shops employing only half a dozen molders to the huge
establishments of some of the best-known manufacturers of heavy
machinery and other cast-iron specialties. No firm is admitted which
is capitalized for less than $50,000, and the entire membership may
at times represent a total capital of half a billion.^ This means, in
general, that they are the most progressive and most efficiently man-
aged plants in the country. The aim of the Association is to keep
them such, for in developing its program for the maintenance of in-
dustrial peace it has well .understood how important a part is played
by fair conditions of work and a body of contented men.
The number of members, the number of foundries represented, and
the number of molders, coremakers, and apprentices employed is
given in the following table :^
iCf. Thirteenth Census of the United States, Vol. IV, Table VI. The fact
that the Association's membership contains a few Canadian foundries makes an
exact comparison impossible.
2 The president stated in 1904 that he represented 600 members with a
capitalization of $400,000,000, employing 60,000 men (The Review, March, 1904,
p. 6) ; and in 1906, 525 members were credited with $500,000,000 capitalization
{ibid. March, 1906, p. 13). As the estimated number of members and operatives
is considerably in excess of the number as reported by the secretary for these
periods, it is entirely possible that the statement as to capital represented is
somewhat liable to correction.
3 The difference between number of members and number of foundries is
due to the fact that some of the concerns operate several shops in different parts
of the country. Since 1907 membership has been counted by separate foundries
rather than firms, but the secretary has estimated the number of the latter
these foundries represent. Figures are for June, 1898; February, 1899; the
average of the last quarter for igoo; and for the succeeding years, for the time
of the annual meeting in November. Number of operatives given for 1899 is
approximate. The secretary reported 94 firms with an average of S9 employees
each. (Proceedings, N.F.A., Buffalo, February i, 1899.)
NATIONAL FOUNDERS' ASSOCIATION
423
Year
1898
1899
I goo
1901
1902
1903
1904
1905
1906
1907
1908
1909
1910
191 1
1912
1913
1914
Number xjf
Mhmbers
66
94
369
377
494
536
456
456
475
421
419
408
426
454
484
500
484
Number of
Foundries
527
579
500
531
474
467
467
492
489
520
536
514
Number of
Operatives
5,500
16,646
27.389
23.359
22,295
14.373
18,585
22,039
20,142
23.593
25.930
21,598
Up to the end of 1903 the membership grew rapidly, but since
then the growth has not been maintained. The causes of the change
are several. The modification of policy as to mere numbers has
already been noted. Between 1898 and 1903 there was probably not
an employer of molders in the United States or Canada who did not
have urged upon him at meetings or through letters or personal
interviews the benefit of membership. Then, too, the years from
1899 to 1903 saw a boom in the foundry industry such as it has not
since experienced. This meant a greater growth of the Iron Holders'
Union and more aggressive activities than have occurred at any
similar period in the Association's history. Thus there was a very
special reason for many foundrymen to seek protection from the
demands of their men. Some of the heavy increase in 1899 and 1900
must certainly be attributed to the signing of the agreement with the
Union, about the efficacy of which as a preventive of strikes all were
very optimistic. After 1903 the attitude of the Association began
to change and many members resigned, some on that account and
some because the industrial boom was waning. Between Novem-
ber, 1903, and April, 1904, sixty-five resignations were received,
while only twenty-one memberg joined ; between April and August
424 TRADE UNIONISM AND LABOR PROBLEMS
thirty-three resigned and seven were added; between August and
November thirteen resigned and two were added. The reasons given
for these withdrawals were that the Association was of no assistance
to the members because of their isolation, failure in business, expense,
disagreement with the Association's policy.^
No loss whatever occurred because of the complete change of pro-
cedure in 1904, although there was considerable fear that this result
would follow the abrogating of the agreement. Some change in the
personnel took place, of course, but resignations were fully counter-
balanced by the acquisition of foundrymen who had previously re-
frained from allying themselves with an organization which they felt
tended to foster in their shops what they believed to be the un-
economic and unfair practices of unionism, and to that extent handi-
capped them as against some of their competitors. Such fluctuations
as have taken place since 1903 may be explained almost entirely by
referring to industrial conditions and the state of the labor market.
When times are good and molders in demand membership increases.
When the contrary is true the Association is not so large. There has
been nothing of late years in the way of generally prevalent labor
troubles to force employers into the Association. It was reported at
the annual meeting in November, 19 14, that protection had been
required for only five members during the preceding year; in 19 13
there were thirty-two strikes, and the membership was somewhat
greater than in 1914; in 1912 twenty-one shops were protected.^
Of the foundrymen who stay out of the Association some consider
it too radical, others are satisfied to allow it to provide conditions
making for an industrial peace in which they share but with the
expense of which they are unwilling to be burdened, and still
others have always succeeded in maintaining such harmonious
relations with their men that they feel no need of help from the
Association.
It has been suggested that the weakening of local influence which
resulted when the district committees ceased to come intimately in
touch with individual affairs might be mitigated by the formation
1 Proceedings, N. F. A., Cincinnati, November 16, 1904, in the Review,
December, 1904, p. 9.
^Iron Trade Review, November 26, 1914, p. 1004; Proceedings, N. F.A.,
New York, November 19, 1913, p. 17; id. New York, November 20, 1912, p. 29.
NATIONAL FOUNDERS' ASSOCIATION 425
of local bodies of foundrymen coming together in the national Asso-
ciation, but this has never proved feasible. There are already local
organizations of foundrymen in a few of the large centers, to which
members of the National Founders' Association in some cases belong,
but as a rule the local groups have been so heterogeneous in their
constituency as to make an effective method of control impossible,
and, except for occasional cooperation in the handling of a particular
local matter, there has never been any connection between the two.
An annual meeting of the Association is held in November at which
officers and district committees are elected. It is a well-established
practice that the vice chairmen of the latter shall succeed the next
year to the chairmanship. Votes have always been allowed on all
subjects in proportion to the assessments paid. At present each mem-
ber has one vote, and those members whose assessments exceed $100
a year are entitled to one additional vote for every $100 so paid.
In the formative years much of the time of the convention was neces-
sarily devoted to discussions of policy, government, and administra-
tive details. But the constitution and by-laws, as well as the policy
which crystallized in 1904, have proved so satisfactory as to have
occasioned no subsequent concern. Except for the necessary routine
business the annual meetings are devoted to consideration of the
larger aspects of the labor problem, such as legislation, both state
and federal, safety and sanitation work, industrial education, and the
like. At many of the meetings there is no mention whatever of trade-
unions. Even the administrative council now meets only at the time
of the annual convention, since there is no constitutional rule regard-
ing this beyond the provision that the president shall convene it in
his discretion or on the written request of four members. Special
meetings of the entire Association may be called when there are
grave conditions threatening its welfare, but only three have ever
been held, the last at the time of the great molders' strike in 1906.
When such emergency meetings are held, any decision there reached
becomes binding on all members.
Foundrymen on joining the Association agree
ist. In consideration of fair dealing being a cardinal principle of
this Association, to protect any of our fellow members who may re-
quire our support against any unjust demands of labor organizations
and to endeavor to settle all disputes amicably.
42 6 TRADE UNIONISM AND LABOR PROBLEMS
2di To obey the constitution and by-laws and all rules made in
conformity with the same, provided they do not conflict with the
laws of the country, state, or province in which we do business.
No bond is required that this pledge will be kept, and at first the
disciplinary machinery was so defective that members could disregard
their obligations with impunity. A particularly bad breach of faith
on the part of some members in igor led to the strengthening of the
hands of the officers so as to give power of investigation and suspen-
sion for cause, and this has been used in a few cases where the mem-
ber concerned settled with the Union after agreeing to leave his
dispute entirely in the hands of the administrative council. It never
was used to force members to live up to the agreement with the Union,
although there were a number of cases of violation in which support
was denied.
Especially difficult have been the cases in which members have
refused to meet their financial obligations. The by-laws require that
if assessments are not paid as they become due (that is, within thirty
days after proper notification), a draft shall be drawn against the
delinquent. If he fails to honor this, his membership in the Associa-
tion ceases automatically, except that the council may reinstate him
upon Ms showing cause for nonpayment and meeting all past in-
debtedness. On the other hand, members are not expected to leave
with dues to the Association unpaid. If sight drafts and collectors
fail to secure payment, a lawsuit may result. The decision in an
interesting litigation in Ohio in 1904 established the legal status of
employers' associations and their right to control their members. It
was held that, being formed for the purpose of mutual protection, the
Association could not only sue and recover for dues and assessments
but also that the application for membership and the acceptance
thereof constituted a valid contract, and that thereafter the member
was bound by the constitution and by-laws.^
The initial financial system left much to be desired both as to
income and expenditure. The annual dues of $50 went into a
general ,fund, available for current expenses, and, in addition, all
members on joining paid into the reserve fund such a sum in propor-
tion to the unexpended balance of the fund as the number of molders
^National Founders' Association v. Taplin Rice and Company, Court of
Common Pleas, Akron, Ohio, 1904. See The Review, January, 1905, pp. 13-16.
NATIONAL FOUNDERS' ASSOCIATION 427
they employed bore to the total number of molders employed by all
members. Each member paid to the reserve fund 10 cents a month
for every molder employed, molders' and coremakers' apprentices and
unskilled coremakers counting two as one molder. The basis of these
assessments was the average maximum number of molders employed
in each month of the preceding quarter as reported to the secretary.
But these sums were not sufficient to carry on the work of the
Association, and special assessments of $1 a molder were levied,
sometimes one, two, or more a year. This meant for many members
a great expense, not always commensurate with the benefit they were
receiving. One of the largest concerns in the organization paid in
one year $600 in regular assessments and between $3000 and $4000
in special assessments. In 1900 the contribution which a firm joining
would have to make to the reserve fund averaged a little more than
$11 per molder, and the total amount paid was in some cases $600
and $700.^ This heavy expense brought a number of resignations.
Other members believed that the burden was not fairly distributed, in
that there was no gradation of assessment on the basis of the molders'
skill, although it was well known that loam or machinery molders
were infinitely harder to replace than squeezer men or machine
operators. In 1902 a change was made to take account of this, and
again in 1904, so that at the present time the assessments are as
follows : for journeymen floor molders, 40 cents per man per month ;
for journeymen bench molders and journeymen coremakers, 30 cents
per man per month ; for molders' apprentices, specialty molders not
skilled in the general trade of molding, molding-machine operators,
unskilled coremakers, and coremakers' apprentices, 20 cents per
man per month ; but in no case may the dues amount to less than
$15 per quarter.
The only foundry employees upon whom Association members
pay assessments and against whose strikes protection is supplied are
molders of varying degrees of skill and coremakers. In 1906, when
the Brotherhood of Foundry Employees (a union of cupola tenders,
helpers, gangway men, and the like) seemed to be growing in power
and importance, the officers of the Association considered the ad-
visability of including them as assessable operatives, with consequent
protection to members in case of trouble from that source. But no
1 Proceedings, N. F. A., New York, November 13, 1901 (MS.), pp. 67, 83.
428 TRADE UNIONISM AND LABOR PROBLEMS
steps have been taken to bring about this added service, due no
doubt to the fact that such unskilled help is replaced so easily that
individual employers can fill without difficulty any vacancy caused
by their striking and that no need has been felt for the Association to
assume this responsibility.
Data regarding assessable operatives have been furnished by the
secretary of the Association from the reports of members for the last
quarter of selected years.^
1900
igoz
190S
rgio
I9I3
Floor molders (skilled) ....
Bench molders (skilled) ....
10,034
10,527
4,220
8,900
3-063
6,404
2,586
7.430
2,800
Soecialtv molders ....
1,807
2,489
3,060
Specialty molders and machine
4,067
Specialty molders and apprentices
Molding-machine operators . . .
1.959
1,248
2,716
2,432
3.219
1,861
4,502
1,968
Molders' apprentices, unskilled
coremakers, and apprentices .
Coremakers (journeymen) . . .
1,907
5-837
2-738
2,217
1.357
867
2,268
1.445
862
2,660
I.9I3
887
Coremakers' apprentices ....
Coremakers (specialty and appren-
tices)
J, 498
Total
16,646
27.389
22,359
21,134
25,220
The annual dues of $50 have been abolished, but the original pro-
vision for contribution to the reserve fund on joining has been re-
tained and supplemented by a further provision that the council may,
in its discretion, collect an even greater sum. The aim has always
been to build up a reserve or defense fund of sufficient size to provide
for emergencies, which should at the same time serve as a preventive
of as well as a protection against the excessive demands of a too con-
fident union. The enormous defense fund of the Stove Founders'
National Defense Association, which has not had a strike of its
iThe figures given here differ somewhat from those presented on page 423,
due to the fact that the latter, except for 1900, are as reported at the annual
meeting in November and are for the third rather than the last quarter.
NATIONAL FOUNDERS' ASSOCIATION 429
molders in twenty-five years, has seemed a feature desirable to copy.
FQr a time it was quite impossible to accumulate very much in the
reserve, but in 1903, due to the growing conviction that the financial
basis was not entirely sound, a number of changes were made which
laid the foundation for the present system. Since then a reserve fund
of some size has been continuously maintained. All assessments now
go into the general fund ; from this appropriations to the reserve are
made from time to time by the administrative council, in whose care
all financial matters have been placed. Special assessments are levied
occasionally for the purpose of increasing the reserve fund and thus
equalizing' the cost of labor troubles over a period of years,, and
they have also been asked to meet the requirements of an unusually
expensive strike.
No financial statement is published. Any estimate of the Asso-
ciation's income based on the data previously presented as to the
number of operatives upon whom assessments are paid is of little
value, because of the unknown but fairly frequent special assessments.
In a sense the financial resources are unlimited, for no difficulty is
experienced in collecting funds when real danger threatens, and it is
the policy to ask for extra contributions at such times instead of
drawing on the reserve fund. No one resigning or expelled is entitjed
to a refund on what he has paid in, unless he is retiring from business,
in which case he receives such a proportion of the reserve as his
percentage of contribution to the average of the last two assessments
bears to the balance of the fund unappropriated.
The defense work of the National Founders' Association thus far
described has been that which aids members who have come into
actual conflict with the Iron Holders' Union. Another part of its
activity is concerned directly with the prevention of strikes. The
undertakings which have been engaged in for the purpose primarily
of avoiding labor difficulties and building up a strong body of non-
union molders should be briefly mentioned. After a most unsatis-
factory trial of private-detective agencies the Association has taken
over its own secret-service work in a department organized expressly
to receive information from special representatives, union and inde-
pendent, in the shops of its members. These confidential corre-
spondents keep the Association informed as to conditions in the
foundries, report incipient trouble and proposed outbreaks of the
430 TRADE UNIONISM AND LABOR PROBLEMS
Union together with suggestions as to how they may be averted,
and help in running down union thugs, wrecking gangs, and opera-
tions of a lawless nature designed to harm Association plants and
nonunion laborers. At no time was the inherent usefulness of this
branch of the Association's work better demonstrated than in 1906,
when through its channels information was received as to the demands
which were to be made by the Union on May i. The Association,
being unwilling to meet them, had ample time to prepare for the
general strike which followed. Organized safety and sanitation work
has been recently undertaken, partly to meet the new workmen's
compensation laws and partly as another means of keeping the men
contented by giving them better places in which to work, thereby
decreasing the likelihood of strikes. The encouragement of friendly
relations between employer and foremen, that the latter may side
with the firm rather than with the Union in case of trouble; of
proper training for apprentices ; of the installation of molding ma-
chines, specialization, etc., so as to avoid the worst features of cessa-
tions ; the insistence upon fair conditions generally, — are all a part
of the Association's defense system, that seems to have borne fruit
in the increasing size and representativeness of the body of non-
union men who are loyal to the Association and can be depended
upon whenever the Union undertakes to cross the path of their
employers.
Inability to reach their men in such a way as to put before them
fairly the principles for which the Association stands, and the larger
aspects of the labor problem generally, was early recognized as a
serious handicap to the establishment of the desired relations be-
tween employer and employees, and in 1904 an attempt was made
systematically to counteract the teachings of unionism on these
points by publishing and distributing to the molders of the country
such printed material as would correctly state the Association's
position, what were believed to be the fallacies of the trade-union
arguments, and the program of equitable dealing under which the
Association aims to operate its shops. The leaflets of this original
experiment have expanded into a creditable monthly journal known
as the Review, which is published jointly with the National Metal
Trades Association, and which has a mailing list of 12,000 names.
Its purpose is to provide gratuitously reading material dealing with
NATIONAL FOUNDERS' ASSOCIATION 431
trade and industrial questions for the metal workers of the country,
who otherwise have to depend upon what is thought to be the one-
sided interpretation presented in the Iron Holders' Journal and similar
organs. In the Review, of course, emphasis is laid on the justice of
the Association's position in the matter of industrial relations.
With the perfecting of the defense system as outlined, the Asso-
ciation has been free to devote itself to other phases of the problem
which is its chief interest. It has cooperated with those organizations
whose purpose is to repress the enactment of laws which make for
the benefit of union men as' against nonunion men and the manu-
facturers. To this end, it has joined with the National Association
of Manufacturers, the National Council for Industrial Defense, and
the Anti-Boycott Association in fighting anti-injunction laws, laws
designed to limit employment in various ways (as certain regulations
of hours), certain types of workmen's compensation laws, minimum-
wage laws, and the like. The National Founders' Association has
itself at times retained a representative in Washington to watch
proposed legislation of possible interest to the Association and to
direct attempts to quash such as is undesirable. On. the other hand,
the Association has given hearty support to those laws which it be-
lieves fair and proper. One of the first men who studied the work-
men's compensation question was appointed to do so by the National
Founders' Association and was afterwards sent to Europe for the
same purpose by the state of Minnesota. The Association's safety
and sanitation expert has helped to draft a number of state compen-
sation laws, that of Indiana being the Association's model law almost
in toto. The Foundry Code recently adopted by New York state was
drawn up by a board of employers all but one of whom were members
of the National Founders' Association.
Enough has been said to show that the National Founders' Asso-
ciation, although a voluntary organization formed to deal collectively
with the employees of its members, is as much of a business as is the
conduct of the private enterprises of any one of its constituency. Its
creed is said to be based on the assumption that its members and
their men are living in a free country and that their constitutionally
guaranteed freedom to contract must not be interfered with by pri-
vate or public forces. It directs its strength against those agencies
which are thought to hold a contrary view and has organized its own
432 TRADE UNIONISM AND LABOR PROBLEMS
activities so as best to meet the opposition and advance its own
welfare. But though all business is selfish in essence, and though the
National Founders' Association is putting into operation those under-
takings which make for its own protection, yet it provides at the
same time safe and sanitary places in which to work, hours no longer
than the going schedule, and wages often in excess of the union rate.
While objection may be raised to the paternalism this program in-
volves, the Association has always justified it on the ground that in
protecting the independent molders of the country against union
monopoly it is performing a real service for those men who wish to
be unrestricted but who without support from their employers would
never be able to throw off the union control which they find irksome.
The present paper does not aim to decide which condition is the
more desirable.
Margaret Loomis Stecker
Cambridge, Massachusetts
XXIX
THE FOUNDERS, THE HOLDERS, AND THE
MOLDING MACHINE'
THE manufactures of iron fall into three general classes: cast
iron, wrought iron, and steel. The present paper deals with
some recent problems connected with the manufacture of cast iron.^
Castings are made by preparing a pattern of the object, usually
of wood, and imbedding this in a matrix of sand or loam of such a
composition as will retain the shape into which it is pressed. The
mold thus formed is made in two or more parts, later clamped to-
gether, with only a small hole or gate through which the metal,
reduced to a fluid state in the furnace or cupola, is poured. When
cool, the casting is shaken out from the sand, is cleaned, and is then
ready for whatever finishing processes are needed. The general in-
dustry of casting metal is called founding, the workers are molders,
the proprietors of the shops are founders or foundrymen, and the
shops themselves are foundries.
Sometimes foundries are adjunct to factories and make only the
castings needed for the finished products of the machine shop.
Sometimes they are not connected with any other establishments,
but do a general machinery and jobbing business independently or
on contract from concerns which have no foundries of their own.
Sometimes they are large or small specialty shops turning out stand-
ardized products ready for the market. Sometimes they combine all
iprom Quarterly Journal of Economics, Vol. XXXII (1918), pp. 278-308.
2 The expansion of the automobile industry in the last few years has brought
a great demand for brass and aluminum castings. Steel castings are a still more
recent development in the trade. The census includes these in its classification
of foundry and machine-shop products; the National Founders' Association is
open to foundrymen in all branches of the industry, and the Union claims
jurisdiction over all molders. The present study, therefore, deals in reality
with the entire field of molding. Although the Union in 1907 changed its name
from "Iron Holders'" to "International Holders'," the former title will be
retained in the present discussion.
433
434 TRADE UNIONISM AND LABOR PROBLEMS
three of the features just described. Foundry and machine-shop prod-
ucts are classed together in the census. They are for the most part
mutually dependent, however, hence the data there presented are
significant as indicating, in a way, the importance of founding. In
1909, foundry and machine-shop products were the second most im-
portant manufacturing industry in the United States, in both the
number of wage-earners employed and in the value of the finished
goods. Not including such distinctive articles as cash registers, cal-
culating machines, sewing machines, electrical machinery, etc., there
were 531,011 wage-earners, and the products were valued at $1,228,-
475,000.^ July I, 1912, 4949 foundries were reported in the United
States making steel, gray-iron, and malleable castings. If brass and
aluminum castings are added, the total in 1912 was 5996.^
The technical development of few industries was so long retarded
as was founding. For many years manufacturers were content with
a shed and the most primitive implements. The main essential in
the production of castings was thought to be a group of skilled
artisans. The molder was supreme. He was supposed to be core-
maker,^ molder, and cupola tender all in one. He cut over his own
sand, shook out and cleaned his own castings, and had very little to
work with except iron, fuel, sand, and a few simple tools. Though
rough and dirty, molding was yet a highly skilled trade requiring
considerable technical proficiency, in which the processes, many of
them apparently simple, demanded long training and experience.
A man had to know how to treat his sand so as to get a mixture just
suitable for withstanding the heat and force of the molten metal.
He had to set the cores accurately and ram the sand around the pat-
tern so as to get a true and substantial matrix. Drawing the pattern
so as not to break the mold was a very delicate process, and any re-
sulting imperfection had to be carefully patched. The mold had to
be properly vented to allow for the escape of gas arising when the
metal was poured. The iron, melted to white heat in the cupola, was
poured by the molder, who carried his own ladle from furnace to
1 Thirteenth Census of the United States, 1910. Abstract, pp. 440-442.
''The Foundry, Vol. XL (August, 1912), pp. 329, 330.
3 Cores are made of sand and placed in the molds to form interior openings
or holes in the castings when the pattern itself does not allow for these. Mold-
ing and coremaking, though closely related, have long been considered by the
workmen to be separate trades.
FOUNDERS, MOLDERS, MOLDING MACHINE 435
mold. In the process, if the mold was not properly made, an ex-
plosion might occur ; or pieces of sand might break loose and run
in with the iron ; or the metal might not flow freely and evenly, thus
leaving unjoined portions ; or it might shrink internally, causing holes
and spongy places. In any of these circumstances the casting was
imperfect ; his time and the material had been wasted.
True, even at this time all foundry work did not demand the same
degree of skill. The making of small and light flasks on the bench
has always required less of the molder than patterns so large and
complicated as to necessitate their being bedded directly in a pit of
sand or loam in the floor. Floor molding, especially if the design is
worked out in loam with a sweep, requires the highest skill in the
trade, and is, because of the position of the worker, arduous besides.
Bench molders, on the other hand, making the smaller patterns, turn
out in a given time a larger number of castings. Machinery and job-
bing work usually takes the best mechanics in the trade. Specialty
work, of which there are some fifty varieties,^ is to a large extent
repetitive and demands a varying range of ability.
The first attempts to substitute mechanical devices for the molder's
skill were crude and attracted little attention. But the inventors
persevered) and when finally the time came that molders were not
to be had except at wages beyond the average employer's reach,
if at all, and then on terms he found distasteful, the producers of
foundry machinery were ready to equip his shop with all sorts of
appliances intended to relieve him of his dependence on human labor.
The result is a foundry differing in many respects from that just
described.
Not without a struggle has this change been brought about.
Indeed, scores of foundries can still be found in which primitive
methods prevail or in which only a slight advance has been made."
This, however, is not peculiar to founding. Nor is it peculiar that
one of the most difficult problems developed in the march of prog-
ress lias arisen from the attitude of the workers in the industry. It
IT. D. West, quoted in Iron Molders' Journal, 1911, p. 270; 1913, pp. 19, 42.
2 The committee on foundry methods of the National Founders' Association
estimated in 1916 that not more than 25 per cent of the foundries of North
America have taken advantage of the available mechanical appliances, (N. F. A.
Service Bulletin No. i, Chicago, 1916, p. 3).
436 TRADE UNIONISM AND LABOR PROBLEMS
is natural for those long trained to a skilled trade to be apprehensive
of the rapid and unrestrained introduction of those forces which they
fear will eventually take it away from them. So it has been in the
foundries. As one mechanical improvement after another has come,
and the molders have seen that their skill was becoming of ever
lessening importance to their employers, they have tried to ward off
disaster in such ways and by such means as have seemed at the
time expedient.
The Iron Molders' Union has naturally taken the lead in protecting
the workers' interests. This organization, nuinbering in recent years
perhaps fifty thousand members,^ is one of the oldest of the existing
trade-unions and is known to be one of the best managed, most
effectively officered, and adequately financed. Its local branches, of
which there are several hundred, decide upon its national rules and
elect its national officers. A general policy once formulated, uni-
form dues and benefits once established through convention vote or
referendum, it is the national officers' duty to see that the law is
carried out.
In 1899 the Union made an agreement with the National Founders'
Association,^ composed of about five hundred of the more important
employers in the industry, to arbitrate disputes and thus do away
with the evil effects of strikes and lockouts. It was the expectation
of each organization that a set of mutually acceptable working rules
would soon be evolved which would standardize conditions in the
trade and make it possible to legislate annually at one conference on
all matters related to wages and shop practice. These standard rules
were never adopted, however, largely because of the fundamental and
unalterable difference of opinion between the two sides as to the
1 Membership of the Iron Molders' Union is very difficult to estimate because
of its fluctuation in response to the ebb and flow of industrial prosperity. The
organization itself no longer makes public its exact numbers. Since 1907 it
has been represented in the American Federation of Labor on the basis of a
membership of approximately 50,000, of which about 47,000 are in the United
States. This is a little more than one third of all the persons in the trade over
which it claims jurisdiction. (Leo Wolman, "The Extent of Labor Organizations
in the United States," in Quarterly Journal oj Economics, Vol. XXX (1916),
pp. 488, 489, 619.) In February, 1917, the editor of the Journal made some
calculations on the basis of a 50,000 membership {Journal, 1917, p. 93).
2 See also Chapter XXVIII, "The National Founders' Association," pp. 406-
432.
FOUNDERS, MOLDERS, MOLDING MACHINE 437
introduction and operation of machinery and the development of
specialized processes.
Mechanical devices had been introduced in the foundries long
before the Iron Molders' Union and the National Founders' Asso-
ciation adopted their arbitration agreement. Some of them, such as
the squeezer (a simple appliance for packing the sand) and the strip-
ping plate (for helping to withdraw the pattern without breaking
the mold) were hand tools which for years the molders had used as
a part of their regular equipment with no idea that either of them
constituted a special kind of machine over which there should be
jurisdictional disputes.^ How unimportant machines were prior to
1890 is clearly shown by the small number of pages devoted to
descriptions of them in the various manuals of -molding published
before that time.
About 1890 the first Tabor machine, operated by power and
designed to ram the sand by a method far superior to anything then
in use, was put on the market. This was followed by machines which
drew the patterns, then by others which combined the ramming and
pattern drawing. Some of the power machines were profitable only
when himdreds of castings from the same pattern were to be made,
but others could be used to advantage for a lesser number, and many
were adapted to fairly complicated work. Bright young laborers
who had never been trained in hand molding began to operate
the simpler types of machines, advancing gradually until even the
most difficult patterns were made under their supervision. The
brains which formerly had vested in the molder were transferred
entirely, through the efforts of engineer and patternmaker, to the
machine.
The heartiest cooperation was met with from the men who were
thus given an opportunity to better themselves. They were more
than satisfied. If day rates were paid, their wages exceeded those of
helpers and gangway men. On piecework, the almost universal
method of paying for molds made on the machines, they could double
the earnings they had received at their former employment. In addi-
tion, they enjoyed a quite definite psychic income accruing from the
^N. E. Spretson, A Practical Treatise on Casting and Founding, p. 234;
E. Treiber, Foundry Machinery (translated and revised from the German by
Charles Salter), p. 2$.
438 TRADE UNIONISM AND LABOR PROBLEMS
fact that they were now mechanics — makers of castings, instead of
mere common laborers. They were strong, they were used to hard
work, and operating the machines was no more arduous than the
tasks to which they had been accustomed.
It must be understood that molding machines, instead of being
labor-saving devices in the sense that they made easier the work of
the molder, often necessitated a material increase in effort by the man
who operated them. Though time was actually saved in making any
one mold, the fact that more molds were produced meant that there
was more sand to shovel, more molds to lift, more molds to pour,
more castings to shake out. That is to say, if a man without a
machine turned out six castings, but thirty with it, he had to per-
form all the preliminary labor necessary to making twenty-four addi-
tional molds, and by just that much was the other labor incidental
to the molding process increased.^ If these extra operations were
performed by laborers and machinery, as has more recently been the
case, the molding-machine operator became himself a mere machine,
with none of the variety to his work which characterized the skilled
handworker.
The few foundrymen who experimented with the machines were
delighted with the results. Their labor cost was reduced because of
the use of laborers at wages far less than those paid to journeymen,
and output was enormously increased. In addition, machine-drawn
castings were found to be more uniformly true to pattern, which
meant less grinding and machine-shop work and therefore easier and
less expensive finishing. Machine-used patterns showed less wear
and tear than patterns used on floor or bench. And, probably more
important than any other consideration to the employer, the installa-
tion of molding machines lessened his dependence on journeymen
mechanics. Machines having been invested in, the working force in
a foundry could be changed with but little inconvenience, for the
skill required for molding was still present in the wood and metal of
the machines, while new operators were easily broken in.
lA typical case is that of a certain job made on the bench and paid for at
the rate of 7 cents per flask. Sixty molds, necessitating 10 ladles of iron, paid
$4.20. Put on the machine, the price was set at 2j4 cents per flask, which would
mean, for the same daily pay, 165 flasks to mold and 28 ladles of iron to carry,
together with 165 flasks to shake out. The Journal characterized this as
"enough labor to put any man out of business." (Journal, 1907, p. 213.)
FOUNDERS, MOLDERS, MOLDING MACHINE 439
Curiously enough, the molders paid almost no attention to the ma-
chines during the early stages of their introduction into the foundries.
They seem to have been entirely indifferent, as if nothing had oc-
curred that affected their trade or their interests. So firmly convinced
were they that no harm could come to them through the introduction
of machinery, as had been the case with numerous other trades, that
they scorned all offers of an opportunity to operate it. They believed
molding would always require manual dexterity and the use of human
intelligence and reasoning power. It could not be reduced to terms
of a machine.^
Yet the use of molding machines- steadily increased. By 1900
nearly 10 per cent of the total molding force employed by the Na-
tional Founders' Association were machine operators, despite the fact
that 62 per cent of the work made in its members' foundries was
general foimdry work, engines, and machine tools, which branches
are the least adapted to machine molding.^
The officers of the Union by this time had come to look facts
squarely in the face. They saw their trade slowly slipping into the
hands of laborers. They saw perfect castings being produced with-
out the expenditure of any particular skill upon them. And they
decided that the Union's policy in this matter must be changed, that
the original attitude of scorn and ridicule had been a grave mistake,
shortsighted and unprofitable. It had not prevented the introduction
of machines — machines were turning out molds; and if the Union
did not now control them, the machines would soon displace the
molders.^
^E.g. Journal, 1896, p. 65. William H. Sylvis, the first president of the
Union, in trying to impress upon his constituency the desirability of making
the trade an honored -occupation through maintaining standards of skill, said,
"Our trade is only in its infancy in this country and it is one of those trades
that can never be interfered with by machinery, for the reason that it requires
a thinking- machine to make castings" (Proceedings, Iron Holders' Union,
1866, p. 12).
2Da.ta furnished by the secretary of the Association from the reports of
members for the last quarter of 1900. This estimate does not include core-
makers. See also Quarterly Journal of Economics, Vol. XXX (1916), pp. 370,
381.
^President's address to the convention of the Iron Holders' Union, 1899
(Proceedings, I. H. U., 1899, pp. 10, ji; Journal, 1899, pp. 395-397). See also
frequent discussion of the subject in subsequent numbers of the Journal, and
Proceedings, I. H. U., 1907, pp. gff.
440 TRADE UNIONISM AND LABOR PROBLEMS
Their problem was the twofold one of guarding against future
danger and of repairing the damage which had already been done.
So strongly was this situation emphasized by the Union's officers at
the 1899 convention that a report with the following recommendations
was indorsed unanimously :
First, that the future policy of the Union should be to seek to
establish jurisdiction over the molding-machine operator and all those
who work in the various subdivisions of the trade of molding ; second,
that they advise and instruct their members to accept jobs on molding
machines and to endeavor to bring out their best possibilities ; third,
that the officers of the organization ask the cooperation of the foundry-
men in forwarding the plan, and in other ways seek to devise means
of putting the new policy into effect.^
This complete change of front was made by a representative con-
vention of the Iron Molders' Union, but in attempting to carry it
out there developed a very difficult situation. The habit of indiffer-
ence had been too long ingrained in the rank and file. They refused
to operate the machines and bitterly opposed the change.^ Foundry-
men, on their part, had become accustomed to laborers at the ma-
chines, found them entirely satisfactory, and were loath to allow the
molders an opportunity to demonstrate their own superiority. But
when these obstacles had been overcome, and the members of the
Union finally took their places at the machines, unsatisfactory results
almost always followed. The output was not nearly as great as the
employer thought it should be ; the machines manifested a persistent
tendency to get out of order. The journeymen, after a few days'
trial, were always wanting to return to handwork. In addition, they
expected to receive the pay which had been theirs as hand molders.
The upshot of the matter usually was that after thousands of dollars
had been invested in machines, in a few weeks they were relegated
to the shed or the yard and no more attempts were made in that
particular foundry to carry on machine molding.^ Or, if the employer
persisted in his use of the machines and returned to laborers as
operators, they were promptly taken into the Union and the Union
1 Proceedings, I. M. U., 1899, pp. 73. loi, 112, 165, 166; Journal, 1899, p. 397.
2E. g., letter in the Journal, 1899, PP- 4i2> 413.
^Journal, 1903, pp. 11-14. See also United States Commission on Industrial
Relations, Hearings at Washington, D. C, Tuesday, April 7, 1914 (MS.) , Vol. I,
p. 256 ; Vol. II, pp. 581-588, 615.
FOUNDERS, MOLDERS, MOLDING MACHINE 441
proceeded to help them secure "a wage commensurate with their
output and skill."^
There is no doubt that many skilled molders, put to work on the
machines, did not honestly try to bring out their best possibihties.
On the other hand, even when they did, results were not satisfactory.
For instance, one foundryman reported that he had five molding
machines operated by molders and two by laborers, and in each case
the class of work was identical. The molders on their machines
turned out from 75 to 100 molds a day ; the laborers made from 175
to 200.^ Another employer had sixty-seven machines. On sixty-two
small work was made and laborers were entirely satisfactory. On
the five machines making the larger molds they lost about 50 per
cent of the castings and could not seem to get the knack of the
process. When journeymen were put on there was no loss from im-
perfect work, and, furthermore, the output was increased. It was
distinctly understood, however, that the molders were to leave the
smaller machines entirely alone.^
There are several obvious reasons for the employers' lack of satis-
faction with journeymen on the machines. In the first place, the
position of the Union was that its members as well as the manu-
facturers should benefit by whatever improvements were introduced.
Thus, if payment was by the piece, the same rate should prevail for
machine as for hand-molded castings. Or, if the day-rate method
was used, as the Union at that time greatly preferred, there was, it
was thought, no justification for the employer's insistence upon a
lower wage rate because the molding was now done on machines in-
stead of by hand. No reason has ever appeared to the Union why its
members should work harder or receive a lower proportional rate on
the machines than at hand molding.* The value of the machines to
the manufacturer is largely determined by the amount of labor and
skill they ehminate from the molding process.
Again, skilled molders had not been trained to the heavier work
made necessary by the machines ; their apprenticeship had been
served to brain and not to brawn. It was inevitable that their
1 Proceedings, I. M. U., igo2, p. 617.
^Report of the Officers, N. F. A., November, 1902, p. 30.
2 Proceedings, N. F. A., November, igoi (MS.) , pp. 93-100.
^Hearings (MS.), Vol. I, p. 314.
442 TRADE UNIONISM AND LABOR PROBLEMS
output should be inferior to that of men whose work on the machines
was easier than that to which they had been accustomed ; who, far
from having any prejudice against it, since they had never known any
other method of molding, were enthusiastic over its use and felt their
best interest to be akin to that of their employers in getting the most
out of the machines.^
Journeymen had everything to lose by the introduction of ma-
chinery,— their trade, their skill, and their pay, — with much harder
work in the bargain. Indifference on the part of many developed into
active opposition, as employers, trade papers, and molding-machine
manufacturers constantly set before them the possibility that in the
near future the new inventions were so to supplant the skilled me-
chanics that they would soon be superfluous encumbrances in the
foundries.
At first foundrymen were willing to let union molders take a turn
at the machines if they so desired. They never for a moment re-
garded it as the molder's right, however, and of course expected that
a much larger output would result than had been possible under the
old hand process. When they found that journeymen would never
i"The reasons for the journeyman molder's not producing a maximum output
on the machine are two : first, Union affiliation undoubtedly has created in the
mind a dislike for and prejudice against the machines ; second, he lacks a
positive incentive to operate the machines to the best advantage. He antici-
pates no increase in his earning power — the reward is negative. The laborer
is promised a large increase in his earning capacity if he gets the most out of
the machine ; the journeyman molder is promised employment at a less remun-
erative work or no work at all if he does not operate the machine to its full
capacity.
"For the reasons stated above, it is doubtful whether a nonunion journeyman
would make a better success as a machine operator than a union journeyman.
The fundamental problem is one dealing with human nature perhaps as much as
with union labor. Any journeyman has through long years become so accus-
tomed to certain fixed standards of a day's work that he finds it difficult to
adjust himself against all inclination and active prejudice to new standards of
output largely exceeding the old. Inquiry in nonunion shops where both floor
and machine molders are employed develops the fact that it is difficult, even
thus when not encountering union prejudice against the machine, to get a man
accustomed to floor or bench work to put up a full day's work on the machine."
(Stove Founders' National Defense Association, Report of the Committee on
Machinery, 1908, pp. 13, 14.) See also Proceedings, N. F. A., November, 190S,
in the Review, December, 1905, p. 43; ibid. February, 1910, p. 6; United States
Bureau of Labor, Bulletin No. 67 (1906), "Conditions of Entrance to the
Principal Trades," p. 714.
FOUNDERS, HOLDERS, MOLDING MACHINE 443
go on machines if there were handwork to be done, that there was
very little if any increase in output, and that the same rate was
demanded for machine as for hand molding, they ignored the Union
entirely and went back to the system of freely employing unskilled
men on the machines.
Only a few months after the Union had voted to cooperate with
the manufacturers in the introduction of machinery, though after a
long enough time had elapsed to demonstrate that the interests of
employer and union employee were essentially divergent, the National
Founders' Association adopted a resolution that they would use
their own judgment as to who should operate the machines ; that
when it seemed skilled molders would do the best work, as was some-
times the case, they would be employed, but that the whole thing
was a matter of shop practice quite outside the scope of any arbitra-
tion agreement, and that "molding-machine operators should not be
considered molders in any agreement entered into. . . ."^
It seems evident that whereas in the beginning the Association did
not conceive of the Union's machine policy as one designed to limit
output, a few months' experience caused a reversal of judgment.^
Members believed they must be free to use the machines as they
pleased ; the high minimum wage demanded by journeymen, com-
bined with their great scarcity during the period of business activity
which characterized the years from 1899 to 1903, made necessary
the introduction of whatever practices would make for less depend-
ence on that class of labor.^ Desirable members were being lost to
the Association because they feared negotiation with the Union
would deprive them of their prevailing or contemplated use of
machines.*
It will be easily understood that the Association's arbitrary re-
moval of the machine issue from the purview of their joint agreement,
just after the Union had voted to enlist the Association's cooperation
in working out a mutually acceptable policy, met with vigorous
opposition from the Union. The first clash came at the now famous
1 Proceedings, N. F. A., February, 1900, p. 35.
^Id. August, 1899; February, 1900, p. 39.
5 Proceedings, Conference between the National Founders' Association and
the Iron Holders' Union of North America, Detroit, October, 1902 (MS.), p. 14.
^Proceedings, N, F. A., February, 1900, p. 38.
444 TRADE UNIONISM AND LABOR PROBLEMS
Detroit conference of June, 1900. Said the National Founders'
Association :
Inasmuch as the molding machine is the product of the machine
shop and not of the foundry, it is not under the jurisdiction of the
molder, but having been produced at the expense of the employer,
there shall be accorded to him the right to operate it in whatever
manner he may elect, the same as his right to operate his power
plant, cranes, or any other mechanical devices which have been
brought into the foundry for the better prosecution of the employer's
and molder's joint interest.^
The Molders' counter proposition was :
That inasmuch as the molding machine is but an improved tool
designed to increase and cheapen the product of the molder and
represents both additional capital invested by the foundryman in
his business and a different method of applying and utilizing the
capital (his labor) of the molder, we recognize that each is mutually
interested in the manner of its operation.^
The Detroit conference ended in a deadlock and was soon followed
by one of the most bitter strikes in the history of the industry. The
settlement of this, after more than seven months of struggle, served
only to confuse the machine issue. Among other things it was
stipulated :
That the right of the foundryman to introduce or operate molding
machines in his foundry shall not be questioned. In determining who
shall operate them regard should be given to the question of how
their best possibilities can be brought out and how the work can
be most economically produced.^
But it was also agreed that in applying the principle of the mini-
mum wage "operators of molding machines who have not learned
the general trade of molding " were not to be considered.^ This was
regarded by both officers and men of the Union as strictly in accord
with the ruling of their recent convention and as in no wise relin-
quishing their interest in the machine question. = Members of the
iProceedings, Conference, Detroit, June, 1900 (MS.) ; 7o«moZ, 1900, pp. 384-387.
^Ibid.
3 Proceedings, Conference, Cleveland, February, 1901 (MS.); Journal, 1901,
pp. 133-135-
* Proceedings, Conference, Cleveland, February, 1901 (MS.); Journal, 1901,
pp. 130, 131, 196, 197.
'i Proceedings, Conference, Cleveland, June, 1901 (MS.) ; Journal, i9oi,p. 403.
FOUNDERS, HOLDERS, MOLDING MACHINE 445
Association, on their part, interpreted it as a surrender to their
point of view and tried to use it as a precedent for introducing and
operating machines at will without consulting the Union at all.^ As
a result the Union became more seriously concerned than before over
the machine issue and found it necessary to repudiate on every
occasion this statement of their machine policy.
The Association's attempt to remove the molding-machine issue
from joint control with the Union was only slightly successful during
the years 1899 to 1903. With business booming and a larger pro-
portion of molders in the Union than ever before, employers had
little choice as to their machine policy. While it is true that the
national union showed no tendency to support a subordinate group
in its opposition to the introduction of machines, help was frequently
given when locals were trying to persuade foundrymen to allow their
members to show what they could do. Some of the local contracts
of the time are interesting as an indication of the expedients resorted
to for the purpose of harmonizing conflicting opinions.
One way of getting around the difficulty was to call the unskilled
nonunion machine operators apprentices, even though, because of the
prevalence of a fixed ratio in some foundries, this necessarily reduced
the number of legitimate learners of the trade. ^ In another instance
1 Report of the President, N. F. A., May, 1901 (MS.), pp. 5, 6; Proceedings,
N.F.A., May, 1901 (MS.), pp. 80-85, 91.
^An agreement signed in July, 1901, Illustrates this:
"Whereas ... it appears that this employment of a laborer on the molding
machines has given rise to some irritation in the shop of the Co., through
a misunderstanding on the part of the molders, and also the further claim on
the part of the Iron Holders' Union of North America that the question of
the use of molding machines by inexpert labor had not been definitely settled
between the National Founders' Association and the Iron Holders' Union of
North America, at the solicitation of Mr. Valentine, first vice president of the
Iron Holders' Union of North America, that the Co. remove the machine
or the laborer working thereon in order to allay any feeling that its use may
have engendered in the shop of the company, the Co. has consented to
call the laborer engaged on the machine an apprentice and to accept him as
such, and under this name to operate the machine for the present. The
Co. agree to make this change solely in the interest of peace, and under the
special condition that none of their rights to operate molding machines in their
foundries by inexpert labor or machine operators are thereby waived or re-
linquished or forfeited in any manner. And furthermore, it shall not be used
as a precedent in any future conference or settlement of the question." (Agree-
ments with Foundrymen, 1901, I. H. U. Miscellaneous Records (HS.).)
446 TRADE UNIONISM AND LABOR PROBLEMS
an arrangement was made whereby molders were to run machines
with flasks more than twenty-four inches square or with an area
exceeding 24"x 24", while laborers or unskilled molders were to work
on machines with flasks less than that size.^ Still others required
that molders be given first choice as machine operators, and pro-
vided for joint determination of the piece or time rate.^ All of these
makeshifts were obviously unsatisfactory so long as no generally
acceptable policy had been agreed upon. The persistent demands
of the Union for a voice in the determination of a matter the Asso-
ciation considered beyond its power was a source of continual griev-
ance to the latter ; the Union was confessedly panicky over the fate
of the trade.
In 1902 the national union, having failed to persuade the locals
to help enthusiastically in the development of the machines by
operating them fairly and bringing out their best possibilities as
determined in the resolution of 1899, not entirely comprehending
the Association's position in the matter, yet realizing that larger and
larger groups of unskilled men were daily turning out satisfactory
castings on the machines, resolved to extend the organization to these
men. The experiment of forming a special local of machine opera-
tors had been tried in the autumn of 1901 and met with such success
that their wages were raised and conditions generally were bettered.
They were represented at the convention of 1902.^ On the basis of
this trial and because of the Union's urgent need to get control of the
machine operators, who otherwise seemed in a fair way to walk off
with the trade entirely, the 1902 convention amended the Union's
admission requirements so as to include, any molder who had served
an apprenticeship of four years or worked at the trade four years
"in any of its branches or subdivisions."* The executive board later
decided not to grant an active card to machine operators until they
^Report of the Officers, N.F.A., November, 1902, p. 50.
2 Agreement between Unions Nos. 19 and 24 and the Henry McShane Mfg.
Co., December 31, 1902 (MS.) ; Agreement between the National Founders'
Association of Pittsburgh and the Iron Molders' Union of Pittsburgh and
Vicinity, no date (MS.) ; Agreement between the Gould Coupler Co., Depew,
N. Y., and the Iron Molders' Conference Board of Buffalo and Vicinity,
January i, 1902 (MS.).
3 Proceedings, I.M.U., 1902, p. 617; Journal, 1902, p. 403.
^Proceedings, I. M. U., 1902, p. 754; Constitution, I. M. U., adopted 1902,
Article VIII, Section 1; Journal, 1902, pp. 531, 532,
FOUNDERS, MOLDERS, molding MACHINE 447
had served their full time/ But even with this special member-
ship they were regarded as an integral part of the Union in
every way.
From then on, the organization of machine operators progressed
rapidly and made increasingly trying the relations between the Union
and the Association. Each subsequent attempt to reach a uniform
agreement on the machine matter — ^and there were many — only
ended in a deadlock, for neither side receded from its original position
in the least. Just as it appeared that the interests of the two organ-
izations were so antagonistic as to make any reconciliation out of the
question entirely, the industrial tide turned, the panic of 1903 was
reflected almost at once in a lessened demand for molders, and the
Association lost no time in taking advantage of this situation to
release themselves from a situation they had come to find intolerable.
The arbitration agreement of 1899 was abrogated by the Association
in 1904, and since then no negotiations whatever have been held
between the two parties to the original contract.
From this brief account of the struggle of the Iron Molders' Union
and the National Founders' Association over the introduction and
operation of molding machines, it must appear that one fundamental
issue, and only one, was involved on each side. There was in the
policy of the national union, no matter what the attitude of the rank
and file, no hostility to the machines. Its officers were agreed with
the National Founders' Association that machines should be used.
They were equally concerned to say when and under what circum-
stances. The Association was insistent in its support of those mem-
bers who considered it their privilege to introduce machines at will.
The Union was organized to protect its members in the sale of their
labor, and this meant that they must control the ways in which the
molding process was carried on. The Association, in order to enable
its members to attain the greatest efficiency in their business, 'had to
guarantee them its absolute control in their own hands. The two
theories are so irreconcilable that it seems doubtful if any satisfactory
permanent arrangement could ever have been reached, even with the
complete cooperation of the local unions, which apparently was not
given during the period in which attempts were being made to bring
this about.
1 Proceedings, I. M. U., 1907, p. 28.
448 TRADE UNIONISM AND LABOR PROBLEMS
One factor not generally understood is worthy of emphasis in this
connection. Almost from the beginning of the industry it has been
the custom of the trade to recognize a "set day's work." When a
pattern came into the shop a few pieces were made from it, and the
foreman then fixed the time that normally would be required to make
similar castings in the future. From then on, each man making
pieces from that pattern was supposed to conform to the established
"set." When the Iron Holders' Union came to be important in the
foundries the amount of the task, or "set," became the subject of
agreement between the shop committee and the foreman, but this was
obviously only a formal recognition of what had always been a legiti-
mate practice of the trade.^ Thus the handworker had, through
long years' practice, become accustomed to turn out so much and no
more as a day's work. It is entirely possible, indeed quite likely,
that journeymen trained to the hand trade and its speed could never
adapt themselves with entire satisfaction to the machine process ;
that for most of the molding-machine work unskilled men who had
never had any other experience, who had no prejudices to live down
or trade tricks to unlearn, would make the more successful machine
operators.
After relations between the Iron Molders' Union and the National
Founders' Association were broken off in 1904, members of the latter
continued to use molding machines with entirely satisfactory results.
Output was increased, and thousands of dollars were annually saved
to those who persisted in using and experimenting with the various
types and combinations of appliances available.^ Some of the achieve-
ments are interesting and suggestive. A report written in the spring
of 1 90s, about a year after a very hard and bitter strike had been
initiated in three large heater shops, notes the following : one foundry-
employing forty men at molding had only five journeymen ; another
had two journeymen out of twenty-eight ; and the third had fifteen
out of a molding force of one hundred and ten. All three firms were
1 United States Bureau of Labor, Eleventh Special Report of the Commis-
sioner, 1904, "Regulation and Restriction of Output," pp. 149, 150; David A.
McCabe, The Standard Rate in American Trade Unions, p. no; Proceedings,
Conference, Detroit, October, 1902 (MS.), pp. 22, 74.
^The Review, October, 1905; Proceedings, N. F.A., November, 1905, in the
Review, December, 1905, pp. 44, 46, 47; N.F.A., Plain Talk Pamphlets No. 2,
p. S-
FOUNDERS, MOLDERS, MOLDING MACHINE 449
using molding machines and had contracted for the delivery of more.
The operators were Poles and Italians, many of whom could not speak
English and who had never worked at molding before. The day rate
was $1.50 to $1.75. At piece prices (the method of paying about
half the force) from $2 to $3 was paid, with more earning in the
neighborhood of $2 than $3. While this was in excess of any pay
the men had received before they took up molding, the saving to
the manufacturer was considerable.^ In these same foundries the
average cost per ton for furnace molding had been $20.50 before
the strike; a year later it was $16.25. When all the machines
which had been contracted for were installed, it was expected the
cost would be reduced to about $14 per ton.^
This same report notes operations at a certain pipe foundry. One
Pole was putting up 16 molds per hour, size 16" x 19", from a
pattern made for 6 pieces of one-and-one-half-inch steam-pipe
fittings, requiring six cores in each mold. The man worked nine
hours continuously at molding and netted 144 molds in that time.
This represented 864 pieces of cored castings weighing 875 pounds.
He was paid ij4 cents per mold, or a daily wage of $2.16. Other
iThe following table of rates (from the Minutes of the Administrative Coun-
cil, N. F. A., August 7, 1905 (MS.)) compares prices paid before machines
were introduced and the machine-molding price: Tormee Subsequent
Price Price
Base ring S0.36 ?o.25
Base ring 55 -27
No. 36 upper deck ' 34 .20
No. 40 upper deck 42 .22
No. 44 upper deck 60 .25
No. 36 lower deck 37 .20
No. 40 lower deck ■ . . ■ .47 .22
No. 44 lower deck 66 .28
No. 36 upper fire-pot 26^ .11
No. 40 upper fire-pot 33I .ii
No. 36 lower fire-pot 24 .11
No. 40 lower fire-pot 29 .11
No. 36 shaking-bar grate oSJ .04^
No. 40 shaking-bar grate ogj .04^
No. 40 short grates 08 .04
Feed doors 09J •°4J
Clean-out doors 05J .02}
Clean-out cellar 06 .03
Water pan Mi -o?
Water-pan frame °5^ ■°^i
^Minutes of the Administrative Council, N. F.A., August 7, 1905 (MS.).
4SO TRADE UNIONISM AND LABOR PROBLEMS
men were said to be turning out 42 pieces of soil pipe, five feet long
and four inches inside diameter. The comment was that no living
molder could put up over half of these jobs by ordinary molding
methods.^
In addition to small and purely repetitive work Association mem-
bers have come to make heavy and intricate castings on molding
machines. The patterns thus mounted may be changed from four to
ten times a day.^ With a proper adjustment of patterns and flasks
almost any mold can be made on some type of machine.^ Indeed,
the only limit seems to be imposed by the size of the machine itself."
The commissioner of the Association cites a number of instances of
large and complicated molds handled in this way. A gas-engine bed
with a flask fourteen feet long, six feet wide and four feet deep,
weighing with sand, pattern, and board nearly 30,000 pounds, was
made on a machine by one handyman and one helper in eighteen
hours, where the previous method had taken the time of one molder
and one helper for five days. The finished casting from this mold
weighed 11,920 pounds and had the additional advantage of being
1000 pounds lighter than it would have been had it been made
according to the old method.^
Further examples might be produced to show the use of molding
machines for this and similar work.^ But it is important to note other
items. In some cases no alteration whatever in the pattern is neces-
sary in transferring from hand to machine molding ; in others ma-
chines can be used only because of the expert engineering skill that
has gone into the making of the patterns.^ For some castings, such
for instance as heavy machinery, part of the molding work may be
done on the machines and part by skilled molders on the floor or the
^Minutes of the Administrative Council, N. F. A., August 7, igoj (MS.).
2 Report of the Commissioner, N. F. A., November, 1908, in the Review,
December, 1908, p. 33.
^Id. November, 1910, in the Review, December, igio, pp. 29, 30.
*Id. November, 1911, in the Review, December, 1911, p. 28; The Review,
January, 1910, p. 33.
^Ibid. September, 1909, pp. 11-13; January, 1910, p. 76.
"See the Review, October, 1909, p. 29; January, 1910, pp. 29, 30. Many
numbers of such papers as the Foundry, the Iron Trade Review, the Iron
Age, contain articles describing the achievements of machines and mechanical
devices of all sorts.
''The Review, October, 1909, p. 29; January, 1910, pp. 71, 79.
FOUNDERS, MOLDERS, MOLDING MACHINE 45 1
bench.^ Again, machines for molding some specialties have been
made absolutely automatic. They require no human labor whatever
save for setting the cores, pouring the metal, and shaking out the
castings.^
With adequate machinery it takes but little time nowadays to
transform a common laborer into a first-class machine molder. At
first it is probable that a considerable amount of bad work was pro-
duced on the machines. For a long time the Union made a great
deal of this point and claimed that the, discount for bad work often
ran from 30 to 50 per cent.^ With proper machines and instruction,
however, it has been found that in from three to six weeks an em-
ployer can safely intrust much to a machine operator, and in a few
months nothing a machine can handle is beyond the powers of
the operators.*
The advantages to foundrymen of introducing molding machines
may be summarized, then, from their point of view, as freedom from
dependence upon skilled labor, and especially from negotiations with
the Union, which had been characteristic of the trade when the labor
of its members was an absolute necessity ; more accurate molds and
longer-lived patterns ; ^ lighter castings ; an increased output varying
from double to forty times the production under the hand system ; "
and a decreased cost of production, amounting in some cases to
75 per cent.^
More progress was made in introducing efficiency methods and
output-increasing devices in the five years immediately following the
1 The Review, January, 1910, pp. 44 ft.
2 See, for example, a description of the continuous process in making radiators,
in the Foundry, Vol. XL (1912), pp. i-j.
8 Minutes of the Administrative Council, N. F. A., August 7, 1905 (MS.);
Journal, 1907, and succeeding years.
* Probably the following account is typical :
". . . The. best trick they have done so far is to jar a 24-inch cylinder.
They reduced the molding time oii this from seven to four days. You would
be surprised to see green men handling is-ton wheels and 33-dnch beds. This
bed plate under the old system, with the Union, was a six-day job, and under
the new system they have just completed nine of them in twenty days. The
first one cost them four days, and they cast one every two days thereafter."
(The Review, June, 1909, pp. 19, 20.)
^Ibid. June 1910, p. 33.
BRearings (MS.), Vol. I, pp. 255, 256.
''The Review, October, 1909, p. 29.
452 TRADE UNIONISM AND LABOR PROBLEMS
break between the National Founders' Association and the Iron
Molders' Union than in the twenty-five years preceding.'^ While a
number of circumstances contributed to bring this about, undoubtedly
the most important single factor was the prevalence of labor troubles
and the activity of the Union.
The strikes of 1903 and 1904, instituted by the Union to resist
the changes in wages and conditions which the foundrymen under-
took to introduce the moment the industrial situation was favorable,
resulted in a number of firms' breaking away from collective agree-
ments entirely. This they were enabled to do to some extent through
the increased use of machines. But the greatest spur to trying out
labor substitutes came in the spring of 1906. During the previous
two years the Union had been preparing for a general advance in
wages, shorter hours, and the like, and in May declared what threat-
ened for a short time to be a general strike to bring this about. In
many foundry centers it was impossible to secure molders except at
the Union's terms. To meet this situation the Association called a
special convention and determined to resist the demands, no matter
what the cost. Hence foundrymen who up to this time had been
indifferent to the molding machines or had refused to consider them
were forced to have them installed in order to get their orders out.
A tremendous incentive was given to inventors also to produce ma-
chines which would take care of work hitherto considered to be
exclusively the province of skilled men.
A circular sent to members of the Association, June 23, 1906, esti-
mated that nearly 1000 machines had been introduced since May
first, and pointed out that increasing numbers of foundrymen were
coming to realize their earning power when operated by intelligent
men. The improvement in technic brought about in that crisis
caused the president of the Association several years later to make
the assertion that until the 1906 strike the founding industry was at
least fifty years behind the times.^
The National Founders' Association has encouraged the introduc-
tion and use of machines in every way. Special committees have been
1 Report of the Commissioner, N. F. A., November, 1909, m the Review,
December, igog, pp. 35, 36; Hearings (MS.), Vol. II, p. 619.
2 Proceedings, N. F. A., November, 1910, in the Review, December, 1910, p. 10.
FOUNDERS, MOLDERS, MOLDING MACHINE 453
appointed to make investigations,^ and it is now the accepted policy
of the Association when a member is having difficulties with the
Union or complains of a shortage of labor to study the particular
shop in question and map out a plan for installing machines to
take the skilled men's places.^ Just what effect the war and its
needs have had on the utilization of machines is not subject to
statistical measurement at this time. The 19 17 convention of
the Association devoted an entire session to the subject, for the
purpose of demonstrating to its members how many current prob-
lems might be solved by the introduction of mechanical equip-
ment. Molding-machine manufacturers are said to be overwhelmed
with orders, and delivery cannot be made in less than six or eight
months. It is to a certain extent true that "the molding machine
and the handyman molder have made possible the open shop in
the foundry."^
Specialization has been developed to the highest possible degree.
Trained designers make patterns so simple that a man with little ex-
perience can use them. Tool-makers have cooperated to turn out
machines for making castings which the molder of twenty years ago
would have said only the most skilled mechanic could produce.
Laborers and operatives trained not in the general trade of molding
but only in one simple branch do work which it was thought be-
longed to the expert on the bench. Coremaking, which everywhere
used to be regarded as a trade in itself, has also become somewhat
of a machine process. The technic of cupola and ladle have been
vastly improved. An overhead crane, reaching into all parts of the
shop, lifts patterns and molds and castings. Sand is cut, mixed, and
sifted, and castings are chipped and cleaned by machinery. In up-
to-date foundries a mechanical engineer often has charge of the entire
plant ; a chemist tests iron and sand for each of the special uses to
which they are to be put. Everywhere the development of the in-
dustry has meant increasing differentiation between the mental and
the manual work, more intense simplification of processes, more
1 Minutes of the Administrative Council, N. F. A., November 19, 1908 (MS.).
See also N. F.A. Service Bureau Bulletins.
2 Report of the Commissioner, N. F. A., November, 1910, in the Review,
December, 1910, p. 27. ^Ibid. p. 30.
454 TRADE UNIONISM AND LABOR PROBLEMS
minute specialization of tasks.^ With this has come greater efficiency
of management, a higher standard of safety, and better conditions
generally for workmen, producers, and the: consuming public.
It is not to be understood that this development of specialization
and the use of machines has entirely eliminated the Iron Molders'
Union from its very important place in American foundries. That
the Union has retained its foothold is due to the tireless watchfulness
of the organization's leaders and their speedy adaptation of union
law to meet the changing conditions. At the 1907 convention addi-
tional steps were taken to get the machine operators into the organi-
zation. This came the year after their only partially successful
general strike had shown how powerful a weapon the molding ma-
chines might be aigainst them. The constitutional qualifications for
membership were defined so as to include machine operators as such ;
they were to be granted a special charter .in any community large
enough to support a separate local,^ and the officers were given great
latitude in determining the method of compensation for work done
on the machines.'
A definite campaign to organize the machine operators was under-
taken forthwith. This plan under way, the Union believed its ma-
chine problem had been solved. But new issues continued to arise.
Individual members insisted upon advocating the destruction of
machines or handicapping their usefulness as much as possible;''
proposals were made to do away with the special machine molders'
cards, which would allow only men who had been at the trade four
years to operate the machines. = The executive board has sanctioned
a number of grievances of locals against the use of handymen on
machines," but has adhered firmly to the policy of organizing and
bringing into the Union as many machine operators as possible.
In the foundries where the apprentice ratio of one to five journey-
men prevails the policy has been to allow machine operators who
1 Subdividing foundry work may be carried to such extremes as to produce
facing-mixers, mold-rammers, pattern-drawers, gate-formers, feedinghead-makers,
mold-closers, metal-temperature judges, mold-pourers, casting-feeders, etc., aU
knowing but the one thing which has been learned in a few weeks (Journal,
1913, p. 41).
2 Proceedings, I.M.U., 1907, pp. 102, 103, 193; Constitution, adopted 1907,
Article VIII, Section 6.
^Journal, 1907, p. 650. ^ proceedings, I. M. U., 1912, pp. 166, 243.
*lbid. 1909, p. 122. eibid. p. 51.
FOUNDERS, HOLDERS, MOLDING MACHINE 455
have served less than four years only if the apprentice quota is
not complete.^ It is expected that in union shops all molding ma-
chines will be operated by union members or apprentices.^ No mem-
ber is permitted to teach or instruct a machine operator who does
not belong to the Union or who is not an apprentice, under penalty
of expulsion. A union foreman cannot work over a nonunion machine
operator unless the latter is an apprentice.^
The net result of .the attempts to enforce in American foundries
these machine policies of Union and Association, so essentially in
conflict, would be hard to estimate. The following table, based on
figures furnished by the secretary of the National Founders' Asso-
ciation, shows the per cent machine operators were of the total
molding force in the foundries of Association members at different
periods : *
1900 9.4 per cent
1905 14.4 per cent
1910 19.4 per cent
1913 22.8 per cent
In the same, time skilled bench and floor molders changed in relative
importance to the total molding force as follows, constituting in
1900 . . . , 75.7 per cent
1905 63.0 per cent
1910 54.3 per cent
1913 51.8 per cent
Comparing these two groups, it appears that while molding-
machine operators have increased considerably in importance to the
total molding force in Association foundries, skilled mechanics have
been displaced at a more than proportionate rate. It thus would
seem that machine operators alone cannot be charged with having
driven journeymen from their accustomed trade. Of nearly as great
importance in bringing this about has been the increase in the num-
bers of unskilled specialty molders. Data available do not permit
of distinguishing this class of labor from apprentices in 1900, but
the increase even from 1905 to 19 13 is significant.
^Proceedings, I. M. U., 1912, p. 222.
^Ibid. pp. 156, 206, 223, 238.
^Ibid. pp. 126, 127, 206; Constitution, adopted 1912, Article XIII, Section 8.
* See also Quarterly Journal of Economics, Vol. XXX (1916), p. 381.
45 6 TRADE UNIONISM AND LABOR PROBLEMS
Per cent specialty molders were of the total molding force:
1905 9.5 per cent
igio 15.0 percent
1913 15.6 per cent
These figures, taken in connection with the preceding groups, must
not, however, be used as conclusive evidence that unskilled workmen
are usurping the places of journeymen in the foundries of members
of the National Founders' Association, because of the fact that there
is no way of measuring to how great an extent the class of foundries
making up the membership of that body has changed, so as to offer
a wider opportunity for the employment of laborers.'^ Nevertheless,
from the facts available it seems likely that while skilled mechanics
continue to occupy an important position in Association foundries,
their place is gradually being taken by inferior craftsmen.
How this tendency compares with conditions generally cannot be
stated. In 1910 the National Founders' Association employed 13.4 per
cent of all those in the country who worked at the trade of mold-
ing.^ Eighty-five per cent of its members run open shops.^ It is
therefore possible that among those foundries where union influence
has had more weight skilled journeymen are of relatively greater im-
portance than in the shops of the Association. , Certainly up to 1908
the Union had succeeded admirably in controlling the machine
situation in the shops of the Stove Founders' National Defense
Association,* and as these two latter bodies never came to an agree-
ment as to the pricing of work done on the machines until 19 14, it
is quite likely there has been but little change up to the present time.
The Union itself offers no data as to the relative importance within
its membership of skilled mechanics, specialty molders, and machine
operators. Nor is there any satisfactory means of estimating the
^An increase in the number of members who made specialties as against those
who made heavy machinery would mean a greater likeUhood of the employ-
ment of machine operators and specialty molders. The reverse would be true
if the increase in members came from the ranks of the heavy machinery-makers.
20n the basis of 18,411 molders and coremakers, exclusive of apprentices,
employed by the National Founders' Association, and a total of 137,262 male
molders, founders, casters, and coremakers enumerated in the census of 1910
(Thirteenth Census of the United States, igio. Vol. IV, Table VI).
3 Hearmgs (MS.), Vol. I, pp. 242-243, 24s, 248, 251.
* Stove Founders' National Defense Association, Report of the Committee
on Machinery, 1908.
FOUNDERS, MOLDERS, MOLDING MACHINE 457
probable composition of its membership at the present time as com-
pared with twenty years ago. It seems very probable, however, on
the basis of known facts, that even though the numbers over a given
period are substantially identical, a smaller and smaller proportion
are skilled men.
This much is true: molding machines have made serious inroads
upon the molders' trade ; the employers of the country have come to
realize the value of machines and are using them in ever-increasing
quantities ; the Holders' Union has been obliged to alter its policy
at a number of points to allow for the changed conditions. On the
other hand, it is not true that machines have made human skill
unnecessary for foundry work. There is still a great demand for
trained men. Even with specialization and machine molding, experts
are required to set cores, finish and close molds, and perform other
similar operations demanding the application of technic and judg-
ment. Some types of molding are as yet entirely unadapted to the
machines.
To how great an extent the proportion of skilled men required will
decrease in succeeding decades cannot possibly be determined. On
this will hinge almost entirely the Union's structure and activities.
And on this will depend to a large degree the future policy of the
Association. If a steadily increasing proportion of the trade is given
over to machines and unskilled foreign workmen whom it is difficult
for the Union to organize and hold in the face of alluring offers from
their employers, the Union is likely to suffer. If the maximum pos-
sibilities of the machines have already been realized, the Union stands
a very fair chance of holding its own, no matter what the organized
employers may do.
Margaret Loomis Stecker
Cambridge, Massachusetts
XXX
COLLECTIVE BARGAINING IN THE
GLASS-BOTTLE INDUSTRY^
THE agreement between the Glass Bottle Blowers' Association
and the National Glass Vial and Bottle Manufacturers' Associa-
tion furnishes an impressive and an instructive exhibit of the feasi-
bility of carrying on for a long term of years a peaceful and mutually
agreeable system of collective bargaining. While friction between the
parties to the agreement has at times been great and while the agree-
ment has often been almost at the breaking point, yet so enlightened
has been the policy of the representatives of both the union and the
manufacturers' association in granting concessions and in yielding
upon disputed points that the agreement has operated, in one form or
another, for almost a quarter of a century. Nor have external con-
ditions been particularly favorable to the continued life of the agree-
ment. The technical revolution of the industry, beginning in the
middle nineties with the installation of the so-called " semi-automatic "
machine and intensified after 1900 by the invention and the later
extensive use of the Owens automatic machine for the manufacture of
glass bottles, has presented to the conferences of the manufacturers
and their employees problems that every year become more perplex-
ing and more difficult of solution. The promulgation of working rules
to govern those members of the union who were employed on the
semi-automatic machines, the regulation of the wage scale so as to
retain a fair wage for the glass blower and at the same time to permit
the employer of hand blowers to compete against the machine, and
finally a new adjustment of wage scales designed to meet the com-
petition of the automatic are a few of the problems which have re-
ceived at the hands of the annual conference, if not a perfect solution,
at least a workable settlement.
^From American Economic Review, Vol. VI (1916), pp. 549-567.
458
THE GLASS-BOTTLE INDUSTRY 459
HISTORY AND GENERAL DESCRIPTION OF THE AGREEMENT
The glass-bottle blowers were organized originally not in one
national organization but in the separate and independent Eastern
and Western Leagues of Green Glass Bottle Blowers. In 1886 the
Western League became affiliated with the Knights of Labor as
District Assembly 143 of that organization, and in the same year the
Eastern League was affiliated as District Assembly 149. As early as
1886, also, there is record of annual conferences between the Eastern
and Western Leagues of blowers and of loosely organized associations
of Eastern and Western bottle manufacturers. The fact, however, that
the organizations in these two sections of the country often worked
at cross-purposes and that concessions from the one would at times
be used to force similar concessions from the other, coupled
with the fact that the frequent passage of journeymen blowers
from district to district made the disciplining of their member-
ship difficult, soon led to a movement to amalgamate the Western
and Eastern Leagues of Glass Bottle Blowers into one national
organization.
In 1890, accordingly, the Eastern and Western Leagues united
in one body under the title of the National Trade Assembly 143,
Knights of Labor of America. And in July, 1891, the assembly
withdrew from the Knights of Labor to become the Green Glass
Bottle Blowers' Association of the United States and Canada. With
the formation, then, of the national organization of glass-bottle
blowers in 1890, the sectional conferences of preceding years were
succeeded by national conferences between representatives of the
union and of the manufacturers.
During the first few years following the amalgamation, evidence
of the conflicting interests of the Western and Eastern manufacturers
could still be found. Thus, at the conference of 1890, although an
agreement could have been effected with the Western manufacturers,
the chairman of the conference stated that he could not promise that
the Eastern manufacturers would be bound by the findings of the
conference. Later the Eastern manufacturers actually withdrew from
the conference. Indeed, it was at that time the opinion of the officers
of the union that the "Eastern and Western manufacturers were evi-
dently trying to effect a settlement independently of each other to
46o TRADE UNIONISM AND LABOR PROBLEMS
create discontent" in the ranks of the union.^ But since the union
would treat only with a joint committee representing the manufac-
turers from both sections of the country, the manufacturers were
unsuccessful in their efforts to revert to the earher sectional confer-
ences. With the gradual development of the machinery of the
conferences and with the growth in mutual confidence of the parties
to the conferences, the conflicting interests of the different sections
became less pressing and the manufacturers' association developed
into a more compact and more homogeneous organization.
Prior to 1899 it had been customary to hold annually one wage
conference in the month of either July or August, usually several
weeks after the union and the manufacturers' association had held
their annual conventions. But this system was soon found to be open
to serious objections. A single annual conference, at which were
submitted by the conferees demands and counterdemands whose pur-
port was known only to their sponsors, precluded, in the judgment of
both the manufacturers and their employees, that familiarity with
the propositions which is essential to their intelligent consideration.
The plan was therefore adopted of holding a preliminary conference
in May, at which would be submitted the demands of both parties.^
Those questions upon which there was little disagreement would be
settled at this preliminary conference. The more debatable prop-
ositions would next revert to the annual conventions of both asso-
ciations for further discussion and would then in July or August be
submitted to the final conference for final disposition.
The value of such a preliminary conference was at once observed.
President Hayes of the Glass Bottle Blowers' Association writes
in 1900 :
The amount of work done at the May conference this year in the
way of listing bottles and discussing important questions proves that
this preliminary meeting of the wage committees has become a vital
necessity, unless, indeed, we are desirous of a protracted wage con-
ference later on, or possibly two or three separate ones, which may
be prolonged to such an extent as to delay or hamper the beginning
of work in the fall. At the May meeting we hear the manufacturers'
side of the story, and are, therefore, enabled to lay it before the con-
vention for discussion and counsel. This is right and proper, as it
1 Proceedings of the United Green Glass Workers' Association of the United
States and Canada, 1892, p. 13. ^Agreement, sect. 40, in Blast, 1899-1900. ,
THE GLASS-BOTTLE INDUSTRY 461
is a matter of duty for us to view all questions from both sides, and
it would be neither just nor safe for us to legislate with only a one-
sided knowledge of matters upon which the trade depends so much
for successful operation.^
With the' establishment and successful operation of the preliminary
conference, elaborate rules, regulating the conduct of the preliminary
and final conferences, were formulated. Of the rules regulating both
conferences the most important were (i) the rule providing that
no question which had not been brought before the preliminary
conference would be considered at the final conference and ( 2 ) the
provision for the submission of questions by the parties to the
conference.^
The agreements made before 1902 laid dowrt the working rules and
price lists for each year, but made no provision for the adjustment
of questions arising between the annual conferences. There was, to
be sure, the rule stating that " all ware not specified in the list shall
be rated at the same price and subject to the same rules, in regard
to weight, as those specified in the list which they resemble in size,
shape, weight, and finish." This clause did not, however, specify
who was to settle disputes arising from disagreements in assigning
new bottles to various brackets, nor upon whom was to devolve the
duty of interpreting the many rules included in the annual agree-
ments. This link in the agreement was supplied at the conference in
1902. At the suggestion of the manufacturers,^ the president of the
Blowers' Association was chosen as the officer to whom " all informa-
tion wanted in regard to the intent or meaning of rules and regula-
tions shall be referred." It was further provided that his decision
was binding until reported to and revised by the joint conference.*
^Proceedings, Glass Bottle Blowers, 1900, p. 47.
2The manner in which questions are submitted to the conference is described
in the following clause of the agreement: "Manufacturers and branches shall
notify each other of all bottles or changes intended to be submitted to the May
conference, and the reason for so submitting them, which notice shall be in
writing. The branches shall send such written notices to the president of the
Glass Bottle Blowers' Association and the manufacturers shall send their written
notices to the president of the National Vial and Bottle Manufacturers' Asso-
ciation." ("Wage-Scale and Working Rules — Glass Bottle Blowers' Associa-
tion," sects. 42-44, in Blast, 1914-1915.)
3 Proceedings, Glass Bottle Blowers, 1902, p. 47.
^Agreement, rule S3, in Blast, 1902-1903.
462 TRADE UNIONISM AND LABOR PROBLEMS
As in the case of all matters included in the annual agreements
between the bottle blowers' union and the bottle manufacturers, the
rules providing a mechanism for the adjustment of disputes arising
between the final conference of one year and the preliminary con-
ference of the succeeding year have since 1902 undergone some
modification and considerable amplification and exist at present in
the following form :
All information wanted in regard to the intention or meaning of
the rules, regulations and prices shall be referred to the president of
the blowers' organization, whose decision in all such cases shall be
binding unless said decision is reversed by the joint wage preliminary
conference in the case of a protest.
Manufacturers who desire to protest against a decision of the
president shall serve notice in writing on the branch in their locality
of their intentions to protest, and shall also notify the presidents of
both the manufacturers' and blowers' organizations of the protest;
this notice shall contain all information necessary for a proper review
of the case protested. Said notice shall be served not later than thirty
days prior to the first day of the preliminary conference.
Protests on decisions made between April ist and July 31st shall
be reviewed at the final conference, with notice as above stated, to
be served no later than August ist.
No case in protest shall be reviewed by either conference unless
the foregoing has been fully complied with.^
Originally, when a clear line of demarcation existed between the
flint-glass-bottle workers and the green-glass-bottle makers, the union
of green-glass-bottle makers, the parent organization of the present
Glass Bottle Blowers' Association, held wage conferences with the
association of green-glass-bottle manufacturers. Later, however, with
the introduction of the tank and the extension of its jurisdiction over
all bottle-makers, whether blowing bottles from tanks or covered
pots, the union held separate conferences with the green-glass and
with covered-pot manufacturers. At the conference of the representa-
tives of the union with the representatives of the Flint Bottle Manu-
facturers' Association for the purpose of fixing prices and rules to
govern the manufacture of covered-pot ware for the season of 1902-
1903, the chairman of the conference, a manufacturer, stated "that
in his opinion all matters pertaining to the making of bottles should
1" Wage-Scale and Working Rules— Glass BotUe Blowers' Association,"
sect. 4S, in Blast, 1914-1915.
THE GLASS-BOTTLE INDUSTRY 463
be settled by one committee, but that while the blowers were prac-
tically all in one association, the manufacturers were unfortunately
divided into two, hence" the necessity for two conferences. In the
following year, therefore, the scope of the manufacturers' organiza-
tion was widened to include all persons engaged in the manufacture
of glass bottles, and a subcommittee was thereafter annually ap-
pointed to consider questions that might arise between the covered-
pot manufacturers and their employees. Now that the manufacturers
of covered-pot ware have been admitted into the employers' associa-
tion, the Glass Bottle Blowers' Association holds annually a pre-
liminary and a final conference with the representatives of one
manufacturers' association, the National Glass Vial and Bottle Manu-
facturers' Association. At these conferences there are drawn four
distinct sets of price scales and working rules, (i) One governs the
manufacturers and employees engaged in the hand manufacture of
glass from the tank; (2) another governs the manufacture of
covered-pot ware ; (3) a third relates to rates and rules for the semi-
automatic machine in the manufacture of wide-mouth ware ; and the
last (4) constitutes the wage scale and working rules governing the
"United and the O'Neill and the one- and two-man narrow-mouth
machines."
The essential features, then, of the agreement between the Glass
Bottle Blowers' Association and the National Bottle Manufacturers'
Association are
1. The provision for annual preliminary and final conferences for
the discussion and settlement of working rules and wage rates.
2. The machinery for the settlement of disputes arising between
the conferences and for the review of these settlements.
3. The promulgation of price lists and working rules for the four
divisions of the industry : the tank, covered-pot, semi-automatic
wide-mouth, and semi-automatic narrow-mouth ware.
THE EMPLOYERS' ASSOCIATION
"The National Glass Vial and Bottle Manufacturers' Association
existed before 1890 as the Western and Eastern Associations of Green
Glass Bottle Manufacturers. These associations were loosely or-
ganized bodies that existed principally for the purpose of holding
wage conferences with the Eastern and Western Leagues of Green
464 TRADE UNIONISM AND LABOR PROBLEMS
Glass Bottle Blowers. With the amalgamation of those organizations
in 1890 the manufacturers effected a somewhat similar combination
which apparently confined itself to the selection of representatives
to the annual national wage conferences with the United Green Glass
Bottle Blowers' Association. Later, upon the absorption by the Glass
Bottle Blowers' Union of all branches of the trade, the employers'
association similarly extended its jurisdiction. In the constitution
revised and amended in 1902, it is stated that the Association admits
into membership "any person who manufactures glass vials and
bottles in tanks or open pots and employs workmen under the juris-
diction of the Glass Bottle Blowers' Association."^ An amendment
to the constitution is now pending which would admit into member-
ship "any person who manufactures glass bottles and jars, either
from tanks or from open or covered pots." ^
The officers of the organization consist of president, vice president,
secretary, and treasurer elected annually by ballot and of an executive
committee appointed annually by the president. This committee,
together with the officers of the organization, constitute the repre-
sentatives of the Association at the annual conferences. Meetings of
the Association are held armually between the preliminary and final
joint wage conferences and are occupied almost exclusively with
the discussion of issues raised in the preliminary conference.
The Association practically restricts its activities to those of
collective bargaining. The object of the Association has been " to in-
crease the mutual acquaintance of all persons engaged in the manufac-
ture of vials and bottles ; to exchange views on the various subjects
that are of general interest ; to look after any tariff legislation affect-
ing the welfare of the business ; to attend as far as possible to any
changes or discriminations in the classifications made by railroads on
the line of goods manufactured and handled by the Association ; to
meet with the blowers' executive board as often as may be necessary
each year to fix a uniform scale of wages for blowing the various kinds
of vials and bottles manufactured for the trade ; to establish rules
and regulations for the government of all factories throughout the
United States and Canada. . . ."^
1 Article II.
^Spedal Meeting, National Bottle Manufacturers' Association, May 26, 1914.
^Constitution, 1902, Article I.
THE GLASS-BOTTLE INDUSTRY 465
Although provision is made for tariff and railroad committees,^ the
organization has shown little activity in this direction.
The relations of the Association and the glass bottle blowers'
union have on several occasions been almost at the breaking point,
and several of the conferences have adjourned without reaching an
agreement. The organization, however, has never become a hostile
association and no record is extant of its having sanctioned, as an
association, even isolated acts of hostility toward the blowers' or-
ganization. In a few cases, to be sure, it has been unable to prevent
members from violating the agreement ; persistent violation would,
however, result in the expulsion of the member from the Association.
The Association has never adopted any system of fines for the
disciplining of its members, either for the violation of edicts of the
Association or of the terms of the joint agreements. Nor did it have
until recently any settled policy toward the union manufacturers not
members of the Association. For some time such manufacturers
were permitted to attend the conferences, to submit propositions,
and to request reviews of the decisions of the president of the blowers'
association. At the final conference in 1913, however, it was an-
nounced that the following resolutions had been adopted by the
National Vial and Bottle Manufacturers' Association:
Whereas, There are a number of Bottle and Jar manufacturers
throughout the United States and Canada, employing members of
the Glass Bottle Blowers' Association who have heretofore received
practically all the benefits derived from the action of the Joint Wage
Conferences, without becoming members of the National Vial and
Bottle Manufacturers' Association, or without contributing towards
paying the necessary expenses connected therewith. Some have de-
clared they would get along better without the association or without
a Joint Wage Conference. Others declare there is nothing to be gained
by membership in the organization so long as they are able to obtain
the benefits therefrom without sharing in the expenses, and by not
being members they argue that they are not bound by the action of
the Joint Wage Conference, yet they gladly accept and make use of
all decisions of said conference that pleases them, therefore be it
Resolved : That the members of our Executive Committee, when
in conference with the workmen's committee, be and are hereby
instructed to decline hereafter to consider any disputes, grievances,
etc., or the listing of bottles, their prices or classifications or any other
1 Constitution, Article III.
466 TRADE UNIONISM AND LABOR PROBLEMS
matters arising in a factory the management of which is in no way
affiliated with the National Vial and Bottle Manufacturers' Associa-
tion that may come before the Joint Conference either directly or
indirectly, thus leaving all such matters to be decided by the Presi-
dent of the Glass Bottle Blowers' Association, whose decisions shall
be final in so far as they pertain to the particular factory, but any
decision he shall make in such cases shall not be construed as estab-
lishing a precedent, nor shall it be applied to, or be binding upon
other factories, but it is understood that any decision thus rendered,
shall upon application by any member of this association, be subject
to review by the Joint Wage Conference.^
These resolutions for a time nonplussed the representatives of the
union. "While this was a rather extraordinary proceeding," writes
the secretary of the blowers' association concerning these resolutions,
"still we could not but agree with them in their contentions. Our
association will, therefore, exercise its best judgment in dealing with
those who do not belong to the above-mentioned association, dealing,
as we have always done, fairly and impartially with all."^ The net
effect of this action of the employers' association is to leave the inde-
pendent union manufacturers in almost the same condition as before.
They are granted by the union the same working conditions and the
same prices as operate in the establishments of those manufacturers
belonging to the organization. There is this difference, however,
the independent manufacturers have no organization to which they
can appeal for a review of the decisions of the president of the
blowers' union.
The skilled branch of the glass-bottle industry is about 90 per
cent organized. During the nineties and the early part of the last
decade strong nonunion centers were to be found in New Jersey,
western Pennsylvania, and Indiana. Vigorous organizing campaigns
by the union resulted in the organization of many of the nonunion
plants, until today a high degree of organization has been reached.
To a considerable extent, however, nonunionism still flourishes in the
gas belt of Indiana and in western Pennsylvania. Of the union manu-
facturers the majority are members of the employers' association,
and the resolution adopted in 19 13 resulted in the entrance of about
thirty-five independent manufacturers. Those who still remain without
1 Minutes, Final Conference, Manufacturers' Report, 1913, p. 4.
2 Minutes, Final Conference, Blowers' Report, p. 19.
THE GLASS-BOTTLE INDUSTRY 46?
the Association feel that the benefits to be gained are not worth
the expense of membership, inasmuch as they receive the same terms
from the union as do those manufacturers belonging to the Associa-
tion. It has also been said that a number of these independent
manufacturers join the Association when they have grievances to be
considered and withdraw when their grievances are passed upon
and adjusted.
THE MAKING OF THE AGREEMENT
Unlike those national agreements which provide only the machinery
for the settlement of disputes and which leave to the local unions the
formulation of working rules and, in some cases, wage rates, this
agreement fixes in detail practically all of the conditions of employ-
ment of the glass-bottle makers. The local unions can legislate only
upon such matters as are concerned with the internal government
of the union. When, however, some unforeseen question arises during
the year an attempt is first made to settle the matter in conference
between the factory committee^ and the employer, and if they are
unable to arrive at an agreement the question is referred to the
president of the union.
All questions relating to prices and rules which are not settled to
the satisfaction of both parties during the year, and those matters,
already in the agreement, which one or the other party wishes to
have amended, are considered at the May preliminary conference. The
questions not settled at this conference and those arising between the
preliminary and final conferences receive consideration at the latter
conference. The matters upon which adjudication is desired are
usually submitted to the conferences in the form of resolutions from
local unions or of requests from individual manufacturers, but all of
such resolutions and requests must conform to the modus operandi
described earlier in this paper.
The members of the executive board of the Glass Bottle Blowers'
Association act as the representatives of the union at the conference.
These members are elected annually at the convention of their or-
ganization and hold office, therefore, only for one year. Although the
acts of the representatives of the union thus frequently become the
iThe factory committee is a committee of workmen in a shop chosen by the
employees in that shop to represent them in conferences with the employer.
468 TRADE UNIONISM AND LABOR PROBLEMS
subject of review by their constituents, the union conferees have
throughout the conference debates shown unusual independence of
judgment. That, however, their conduct has reflected the mature
opinions of the majority of the union is attested by the fact that many
of the members of the executive board have been reelected over a
number of years. Indeed, the president of the Association, an ex
officio member of the board, has now held that position for almost
twenty years.
The representatives of the union have full power to settle questions
without referring the matter back to their organization. Nor do they
go to the conferences instructed to take one stand or another. At-
tempts have, to be sure, been made from time to time to instruct
the representatives to follow out a certain line of action or to strip
them of the authority to settle the more important questions arising
at the conference. These attempts have, however, always been met
by the concerted opposition of the officers and of the majority of the
membership. Thus, early in the history of the agreements resolutions ■
were introduced at a convention removing the power from the con-
ferees to settle anything relating to price lists, apprentice laws, or
market money. These resolutions were received with the following
comment from the president of the imion:
To adopt the amendment would simply deprive your officers of
all executive power and make them mere figureheads to represent the
organization. Take away the power to concede or alter anything in
the price list, apprentice law, or market money and you leave nothing
of any importance on which to treat with the manufacturers' wage
committee. No committee of manufacturers would meet your com-
mittee unless it had full power to act and bind the association, and if
this convention takes this power from them it would be more sensible
to put your demands on paper and send them by post, saying that
such is the will of the conventions, than to send your representatives
there merely to state it. This convention does not represent all the
glass trade, only the working portion of it. Your employers represent
the other portion. They also have an association and appoint a
committee to present their demands in conference. If they adopt
the same principle as is embodied in this resolution or amendment,
giving their committee no power to act on the main questions, do you
for a moment think a settlement would ever be effected? No man
with any self-respect could accept office under such restrictions.^
1 Proceedings, United Green Glass Workers, 1894, P. 24.
THE GLASS-BOTTLE INDUSTRY 469
Again, in 1906, the attempt was made to instruct the representa-
tives of the union on a definite proposition. Here too the attempt was
unsuccessfuL In this case the resolution providing that the "30th
annual convention instruct our president and executive board to enter-
tain no proposition for reduction in wages the coming season" was
replaced by the resolution "that it is the sense of the convention
that we do not deem it advisable to accept a reduction for the
coming season."^
The members of the executive board of the manufacturers' asso-
ciation are similarly the representatives of that organization at the
annual wage conferences. Instead, however, of being elected annually
by the convention, they are appointed annually by the president of
the organization. Like the union conferees, they are sent to the
conferences uninstructed. But here, as in the case of the union, dis-
satisfaction with the work of their representatives has at times been
expressed by manufacturers. These objections have arisen generally
from two sources. In the first place, the manufacturers of handmade
ware have long protested that their representation upon the wage
committee has been inadequate and that all legislation is framed to
benefit the machine manufacturers at their expense. Accordingly, in
1912 a number of the hand manufacturers withdrew from the annual
conferences on the ground that those conferences were "dominated
by the machine manufacturers, and we do not care to have the ma-
chine manufacturers adjust the' wages for the hand blown." ^ The
other protest arises from those manufacturers who feel that their
executive committee has not presented the case of the manufacturers
as vigorously as it might, nor has it been insistent enough in pressing
their demands. From these feelings grew out the request that the
president appoint, in addition to the usual committee, two alternates
to be selected "from the twenty or more members who have protested
present conditions " with the power to attend the wage conference." '
At the preliminary conference of 1914 a number of manufacturers
and members of the National Bottle Manufacturers' Association
"asked permission to confer with the members of the committee
^Proceedings, Glass Bottle Blowers, 1906, p. 228.
^Id. 1912, p. 171.
3 Proceedings, Annual Meeting of the National Bottle Manufacturers' As-
sociation, August, 1914.
470 TRADE UNIONISM AND LABOR PROBLEMS
representing the manufacturers and desired to be heard concerning
matters in which they were interested." Their request was granted.
When the meeting was called to order, it was announced "that the
meeting would be of an informal nature and each person present
was permitted to talk upon any matters that were coming before the
Joint Wage Committee. . . . Nearly all of the visiting members
had more or less to say, and many things were explained in regard to
the methods and manner of conducting the conferences. , . . The
visiting members stated later that they had learned many things
concerning the joint conference which they did not know, and before
retiring expressed themselves as being much better satisfied than
when they came."^
While these movements of protest have no doubt exerted some
influence on the conduct of the conferees, neither in the case of the
union nor in that of the manufacturers' association have they effected
any change in policy concerning the relation of the representatives to
their respective organizations. All representatives attend the annual
conferences as exponents of the sentiments of their constituents ;
rarely, however, do they attend bound by specific instructions.
No formal system of voting is provided for in the agreement, but
it is the prevailing practice in the conferences for the manufac-
turers' representatives and for those of the union to vote as units.
A mere majority of the members present, therefore, is not sufficient
to carry a measure. The measure must be agreeable to a majority
of the representatives of each party before it can become a part of
the agreement.
On several occasions the conferences have resulted in deadlocks.
Under such conditions it has been the custom for the conference
to adjourn and for the majority of the establishments to resume
operation under rules and prices of the preceding year in the hope
that the following year would find the union or the manufacturers less
obdurate. The climax of a series of demands by the manufacturers
for substantial reductions in piece rates came in 1906, when the
representatives of the employers persisted in demanding reductions
which the union refused to grant. During the debate on the prop-
osition Mr. Ralston, president of the manufacturers' association,
1 Proceedings, Preliminary Wage Conference, Manufacturers' Report, 1914,
p. 3-
THE GLASS-BOTTLE INDUSTRY 471
suggested that "the matter be submitted for arbitration to a judge
of the courts."^ The suggestion was not acted upon. Indeed, the
consensus of opinion in the trade seems to be opposed to the sub-
mission of major issues to arbitration. Both employers and employees
prefer to thresh out the matters in conference and, when it is found
to be impossible to reach an agreement, to work in a state of armed
truce for one or more years under the rules of previous years.
When it was stated above that in the event of a deadlock the manu-
facturers would open their plants under the rules and prices in
operation during the preceding year, it should have been noted that
these resumptions of work frequently took place some time after the
annual conference had adjourned. During this period between the
adjournment of the conference and the acceptance by the manufac-
turers of the union's ultimatum the agreement may be said to have
been suspended. For example, at the conferences in 1905 the manu-
facturers demanded a general reduction in piece rates of 33% per
cent. This reduction the union would not concede. The manufac-
turers, therefore, moved to adjourn without setting a date for a further
conference. On September i, 1905, the president of the Glass Bottle
Blowers' Association issued a circular letter containing the following
statement:
Up to the present we have heard nothing from the manufacturers'
association. Those among their members who insisted on a reduction
and favored adjourning the conference until the same was secured
will doubtless remain idle as long as they possibly can, while others
in that association, coupled with the independent manufacturers, will
begin starting their factories early this month.^
From this statement it is seen that for several months, at least,
after the adjournment of the final conference the industry was
1 Proceedings, Glass Bottle Blowers, 1906, p. 59.
2 They could open their factories and employ members of the union under the
previous season's list and rules; for on August 8, 1905, President Hayes had
issued the following circular letter to the trade: "Manufacturers who desire
can engage our members to work by agreeing to pay last season's wages, and
if any of them are doubtful about our ability to hold out and want assurance
that they will be given the benefit of any settlement that may hereafter be
made different from that which we demanded (last year's list and rules),
branches are authorized to say to such employers that they will be given the
advantage of any settlement that may be made later on and from the date upon
which they started to work."
472 TRADE UNIONISM AND LABOR PROBLEMS
virtually in a state of lockout, or, more accurately, the agreement was
temporarily suspended. The same situation arose in 1909. Again
the manufacturers' demand for a substantial reduction had been re-
fused by the union. Accordingly the conference of July 26, 1909,
disbanded, and the manufacturers did not open their plants. Early
in September, however, the American Bottle Company agreed to
accept the concessions of the union. Moved by this break in its
ranks, the manufacturers' association sought another conference, at
which an agreement was finally reached.^
In both instances, and in fact in all other similar cases during the
life of the agreement, the strength of the union, in that it is virtually
impossible to run nonunion shops in the glass-bottle industry, forced
the employers to resume operation under conditions not entirely
satisfactory to them. Technically, of course, this delay in opening
a plant might be described as a lockout. It has, however, not been
so regarded by the parties to the agreement. Even though conferences
were adjourned without reaching any agreement and the manufac-
turers were forced, probably because of the superior strength of the
blowers' organization, to employ the men at terms unsatisfactory to
themselves, yet in the following year they showed confidence in the
efficacy of a system of collective bargaining by again entering the
conferences with their employees.
THE SETTLEMENT OF DISPUTES ARISING UNDER THE
AGREEMENT
In an agreement which specifies, in such detail as does the present
one, practically all of the conditions of employment the matters
which arise during the year are as a rule purely interpretations of the
agreement. For example, a new bottle is introduced in one of the
factories and a dispute ensues as to the price to be paid for blowing
the bottle; since the agreement states that the bottle shall "be rated
at the same price and subject to the same rules in regard to weight
as those specified in the bracket which they resemble in size, shape,
weight and finish,"^ but little room is left for any great differences
of opinion. The same might be said of any question that might
1 Proceedings, Glass Bottle Blowers, 1910, p. 11.
2 "Wage Scale and Working Rules," sect. 34, in Blast, '1914-11)1$.
THE GLASS-BOTTLE INDUSTRY 473
conceivably arise under the agreement. So inclusive are the annual
agreements and so definite are their terms that probably the majority
of disputes arising in various localities are settled by merely turning
to a particular rule in the agreement and applying it to the case in
point. On the other hand, disputes have been observed under the
agreement where there was no question of the interpretation of rules
but where one or the other of the parties deliberately violated or
disregarded the agreement.
The first step in the adjustment of disputes under the agreement
consists in referring the matter to a conference of the employer and
a factory committee. Most disputes are settled in that conference.
When, however, the conferees are unable to agree, the question is
referred for settlement either to the president of the union or to one
of the executive board of that organization whom the president desig-
nates as his representative. The president's decisions are final unless
reversed at the following joint conference. Although the president of
the union has been acting as arbitrator since 1902, his decisions have
been but rarely reversed. The great majority of his adjudications are
concerned with the determination of prices on new ware, samples of
which are sent to the central office of the union for his inspection.
In those cases where he has decided upon a certain price and that
price is found by the joint conference to have been too high, the
manufacturer is reimbursed for the excess wage payments ; conversely,
a decision in favor of the employer, which might be reversed by the
joint conference, forces the employer to make up the difference in
wages. Instituted originally at the suggestion of the employers,'^
the system of delegating to the president of the union the power of
interpreting rules and of settling disputes has, during its existence of
twelve years or more, worked admirably. With hardly an exception
the decisions made by the president during his incumbency have met
with general approval ; and no record is as yet to be found of any
suggestions, from either workman or manufacturer, which would so
modify that section of the agreement as to remove from the president
of the Glass Bottle Blowers' Association his present powers.
The history of the operation of the agreement has been notably free
from strikes and lockouts. The great centralization of power in
the hands of the national organization, and the apparent general
^Minutes, Preliminary Conference, Blowers' Report, May, 1902, p. 21.
474 TRADE UNIONISM AND LABOR PROBLEMS
opinion among the members of the union that such centralization is
wise, has resulted in a universal support by the subordinate unions
of the mandates of their national officers and of the decisions of the
joint conferences. When, for example, a general reduction in piece
rates was adopted by the conference, several local unions in San
Francisco expressed their dissatisfaction with the agreement and
struck. This violation of the agreement was met with prompt action
by the national officers, who ordered the strikers back to work. The
strikers first denied that they had stopped work, but after a few
days, when the charge was proved, they returned to work under the
prices and rules against which they had revolted.^ The action of the
national officers was upheld later by the national convention of
the union.
Similarly, among the manufacturers, the attempts to violate the
agreement by locking out the employees or by running shops under
rules contrary to those adopted by the conferences have been few and
far between. In this case, however, compulsion upon the manufac-
turers has not come from the manufacturers' association. This or-
ganization, unlike the Glass Bottle Blowers' Association, has little
control over its members and can, therefore, do little in forcing its
members to observe the terms of the joint agreements. The follow-
ing debate at the conference of 1905 indicates the position of the
manufacturers' association in enforcing upon its members the de-
cisions of the joint conference :
Mr. Hayes stated that it was a sort of rule among his predecessors
at these conferences to ask the manufacturers whether they would
abide by the decisions of the conference, but such a course has not
been his policy, because he always assumed that the agreement would
be lived up to by all of the manufacturers represented by the com-
mittee, but during the past year some had violated the agreement and
some had intimated that the executive committee has been accused
of extending special favors to some manufacturers while refusing them
to others. . . . The chairman (a manufacturer) stated that when the
agreement is signed it becomes a moral obligation of all manufacturers
employing union labor to live up to it, but that there was nothing
in the hands of the committee or the individual members thereof to
enforce it. Any manufacturer could refuse to obey it, the power to
enforce being wholly in the hands of the blowers.^
1 Proceedings, Glass Bottle Blowers, igio, p. 153.
2 Minutes, Final Conference, Manufacturers' Report, 1905, p. 4.
THE GLASS-BOTTLE INDUSTRY 475
Although the power to compel obedience to the agreement and
to the decisions of the president of the blowers' association in his
settlement of disputes resides in neither the employers' association
nor the union, yet the desire of the manufacturers generally to avoid
any action that might lead to a discontinuance of the annual con-
ference, and the strength of the union, which enables it to bring
recalcitrant employers into line by threatening to withdraw their
working force, are the two factors which operate to prevent more
frequent and more serious breaches of the agreement.
It will have been observed in the foregoing discussion that the
few suspensions of the agreement have arisen not from dissatisfaction
with the adjudications of minor issues under the agreement, but
have in reality constituted revolts against the settlement of the major
issues embodied in the agreement. For instance, at the preliminary
conference of 1909 Mr. Hayes reported that some of the manufacturers
had refused to be bound by the agreement and had operated their
factories during the so-called " summer stop " agreed upon by the last
conference.^
Here, obviously, there was no question of the interpretation or
application of a rule of the agreement, but a deliberate disregard of
a rule whose meaning and intent was plain. This situation, which is
in a way a typical one, suggests the following general proposition con-
cerning the operation of the agreement: Where the national agree-
ment lays down in detail working rules and piece rates, leaving to
local adjustment matters of purely secondary importance, the dis-
putes arising between conferences are likely to be, as they are in
this particular instance, protests not against interpretation of the
agreement, though there are undoubtedly some disputes of such a
character, but against attempts to enforce the plain letter of the
agreement. The remote design behind such protests is, of course,
the desire to stir up a sentiment against the objectionable practice
or rule and to have that rule amended or rejected at the following
conference.
The practical absence of any widespread violation of the agree-
ment can be attributed primarily to two factors : ( i ) the character
of the persons in the industry and (2) the national character of the
agreement.
1 Minutes, Preliminary Conference, Manufactiirers' Report, 1909, p. 8.
476 TRADE UNIONISM AND LABOR PROBLEMS
1. The members of the Glass Bottle Blowers' Association have
always been and are today highly skilled workmen, whose earnings
were for many years far above thpse of skilled workmen in other
industries. The high wages earned and the skill required to perform
the work have apparently combined to form workmen of conservative
instincts and of mature judgment. The character of the workmen
has again and again been evidenced in the selection of officers of a
high type and in the general support by the membership of such
legislation as the voluntary reduction of piece rates, which would
in other industries have engendered the deepest hostility among the
rank and file of the organization. In addition, problems following
the introduction of machinery, of the gravest import to all members, "
have been met, if not always with perfect assurance and without
petty squabbles, at least in an open-minded and intelligent fashion.
2. The national character of the agreement, which lodges in the
national officers of the union the responsibility for the content of the
agreement and for its enforcement, imposes upon these officials a
personal interest in the successful working of the agreement which
makes for a more diligent and more stringent enforcement of its terms.
From the standpoint of the machinery of the agreement, also, that
clause which designates the president of the blowers' association as
the arbiter of interconference disputes probably inspires in the mem-
bers of the union a respect for the agreement and a belief in its fair-
ness which might otherwise not have existed. The adherence of the
employers to the agreement is perhaps even easier to explain. In the
first place, this system of collective bargaining, by maintaining uni-
form wage scales and working rules throughout the whole of the
industry, has eliminated the objectionable inequalities, as between
different employers, that are an inevitable accompaniment of a de-
centralized system of collective bargaining. Second, the history of
the agreement has been such as to modify to a considerable degree
the attitude of the employers toward their workmen. For on three
different occasions the union, after much pressure to be sure, has
agreed to substantial reductions in wage rates.
Leo Wolman
University or Michigan
XXXI
THE SAN FRANCISCO BUILDING TRADES'
THE brewery trades and the building trades represented the two
extremes among the trade-unionists of San Francisco as regards
collective bargaining and trade agreements. The brewery trades had
long and effectively upheld such policies, while the building-trades
unions had as vigorously opposed them. Yet both groups had com-
pletely dominated their respective fields and had secured the greatest
returns for their members.
The effectiveness of the Building Trades Council was due to a
great extent to the thoroughness of organization existing among the
building-trades craftsmen, which was made possible by the measures
and policies adopted by the Council and its executive officers. It
spent little or no time in idle talk and in passing meaningless reso-
lutions. It did things, and while the methods employed at times may
be open to criticism, one is compelled to admit that it obtained higher
wages, shorter hours, and better conditions of employment for its
members than would otherwise have been possible.
In the first place, the Council stood for the rigid enforcement of
the working-card system, whereby every worker was compelled to
carry his working card, showing that he was a member of his union
in good standing. The State Building Trades Council, through its
general executive officers, issued quarterly working cards to the
local building-trades councils, which were then reissued to the affil-
iated unions, and by them to their paid-up members. These cards
were of different color for each quarter of the year.
The constitution and by-laws of the State Building Trades Coun-
cil declared that this working-card system was to be "enforced in
accordance with the local law and the objects of the State Building
Trades Council." The San Francisco Building Trades Council
iProm the University of California Publications in Economics, Vol. IV
(1918), pp. 331-342-
477
478 TRADE UNIONISM AND LABOR PROBLEMS
strictly enforced this policy. Sections 1-5 of Article II of the by-laws
of the local council, which related to this matter, were as follows :
Section i. Quarterly working cards shall be issued to unions quar-
terly two weeks prior to issue, bearing the seal of the Council and the
signatures of the President and Recording and Corresponding Secre-
tary. It shall be the duty of the Financial Secretary of each affiliated
union to attach his signature to each card issued to the members
thereof.
Section 2. It shall be the imperative duty of all members of unions
affiliated with this Council to carry the current Quarterly Working
Card of the State Building Trades Council, or a permit issued in lieu
thereof, while at work. Any member working without said card sha;ll
be subject to a fine of one day's wages for each day he so works, and
must immediately cease work upon the request of any member of any
affiliated union until such time as he secures a current Quarterly
Working Card of the State Building Trades Council, or a permit
issued in lieu thereof.
Section 3. It shall be the duty of all members of unions affiliated
with this Council to show such working card when requested to do so,
or when challenged by any duly accredited Business Agent of this
Council. Any member refusing to show his card when requested to
do so shall be subject to a fine of not less than one day's wages.
Section 4. Each craft when starting to work on a job shall appoint
a steward for said job. Stewards shall see that every man working
upon the job carries the current Quarterly Working Card of the State
Building Trades Council. Stewards of the different crafts shall inter-
view the workmen of each craft employed thereafter on said job, and
ascertain before 8 a.m., between 12 m. and i p.m., or after 5 p.m.
if they have the current Quarterly Working Card of the State Build-
ing Trades Council. Stewards neglecting to perform their duty or
failing to immediately notify the Council of any man working with-
out such card shall be subject to a fine of not less than one day's pay.
Section 5. Each member of every union affiliated with this Council,
upon going to work on any job where other workmen of the building
trades are employed, shall, before beginning work on said job, ascer-
tam if other workmen thereon carry the current Quarterly Working
Card of the State Building Trades Council. Should any workman
without the current Quarterly Working Card work on any job, it
is the duty of each and every member of affiliated unions working
thereon to immediately notify the Council. Failing to do so such
members of affiliated unions shall be subject to a fine of one' day's
wages for each day that they work with any workman not carrying
the current Quarterly Working Card of the State Building Trades
Council. "
THE SAN FRANCISCO BUILDING TRADES 479
All matters bearing upon the violation of these sections which in
any way concerned the Building Trades Council, and appeals from
fines imposed by the local unions, were brought before its executive
board. During 1913 and 1914, owing to the stress of unemployment,
the executive board had a large number of violations of the above
sections brought to its attention. Fines were imposed and sincere
efforts were made to enforce the regulations of the Council.
Another matter which made for the effectiveness of the Building
Trades Council was the vigorous manner in which the policies of
the Council were carried out by those in charge of its affairs. Various
means were employed by its officers to crush any and all opposition
either to themselves or to the policies for which they stood. At times
those in control of the Council's affairs did not hesitate to break up
a union if perchance it evidenced any inclination to oppose those in
power. Organizations were ousted from the local council and their
members declared to be "unfair" even though duly affiliated with
their international union and in good standing therewith. At times
a rival union was formed for the purpose of coercing some recalcitrant
organization into accepting the rulings of the Council. After the old
union had been completely coerced, the Council at times ordered the
rival organization to be dissolved and its members to apply for ad-
mission in the old union. Initiation fees had to be paid over again,
and at times it happened that the members of the rival union, who
were the means of coercing the old organization, were denied admis-
sion to the latter.^
lAn instance of the above is to be found in connection with the plasterers'
strike in 1913-1914. In the latter part of 1913 a jurisdictional dispute arose
between the plasterers and carpenters regarding which union should have juris-
diction over the framing and nailing up of staff work on Machinery Hall at
the Exposition grounds in San Francisco. The Building Trades Council ruled
that the work in question belonged to the carpenters, whereupon the plasterers
struck. The Building Trades Council then ousted them from membership in
the Council and proceeded to organize Plasterers' Local Union No. i. The
president of the Building Trades Council declared that the members of the old
union, No. 66, would have to af&liate with the new union before they could
again work in San Francisco. The controversy was settled on January 16, 1914;
the old plasterers' union, No. 66, withdrew its demands and was reinstated in
the Building Trades Council. Those plasterers who had joined Local No. i
were then informed that if they desired to work at their trade as union men
in San Francisco, it would be necessary for them to pay an initiation fee of $50
and join Local No. 66. Other instances of similar character might be cited.
48o TRADE UNIONISM AND LABOR PROBLEMS
Another cause of the effectiveness of the Building Trades Council
was the permanency of its officials. It had retained the same presi-
dent since its inception. The tenure of other officials had also ex-
tended over comparatively long periods of time. In the case of the
Labor Council, on the other hand, no men or set of men had ever
dominated its policies for any considerable length of time. Its affairs,
as a rule, had been most democratically managed. Permanency in
office in the Building Trades Council had been made possible in part
by such means as organizing unions to secure votes, dissolving ob-
streperous unions, hounding those men who had opposed or objected
to the policies of the Council's officers,^ interfering, sometimes by
the use of "strong arm" methods, with the election of the officers
and delegates of local unions, manipulating the number of delegates
allotted each union by the rules of the Building Trades Department
of the American Federation of Labor so as to give more than the
allotted number of delegates in the Building Trades Council to
favored unions, and by similar methods. While the means employed
to attain the end desired may be seriously questioned, yet it must be
admitted that the permanency in office thereby secured made possible
the pursuance of a consistent set of policies which in its turn made
for the dominance and strength of the Building Trades Council in
the local field.
The Council also reserved to itself the right to refuse at any time
to seat delegates sent to it by any affiliated union if those delegates
or any of them were objectionable for any cause whatsoever to the
delegates already seated in the Council. By this means it was usually
able to keep out so-called disturbers or objectors.^ The Council also
reserved to itself the right to expel any delegate or to take away his
vote if at any time it desired to do so. By such methods a more uni-
fied and cohesive working body was secured whose time was not
largely taken up with petty janglings and quarrels as would otherwise
have been the. case.
1 By making it impossible for them to obtain or retain employment, by filing
false charges against them before the union or the Building Trades Council,
and by various other means.
2 Section 2 of Article II of the constitution of the Council provided that
" The Council, however, reserves the right to object to the seating of any, or
all, delegates who, in its judgment^ are considered undesirable or detrimental
to the best interests of the Council."
THE SAN FRANCISCO BUILDING TRADES 481
The Council was effective also because it enforced its decisions and
awards. It compelled its constituent unions to abide by its mandates.
The Council agreed to affiliate with the Building Trades Depart-
ment of the American Federation of Labor only upon condition that
it be permitted to retain its autonomy and also its power over its
constituent unions. There had been fewer strikes in the building
trades in San Francisco than elsewhere owing to the rigorous methods
and policies pursued by the Council and to its ability to compel the
affiliated unions to respect and abide by its decisions. All demands
for increased wages, shorter hours, and better conditions of employ-
ment had first to be approved by the Building Trades Council. Its
decision in the matter was final. There could be no appeal. Any
union which refused to obey the decision of the Council was ousted
from that body and declared to be unfair. A rival union might then
be formed to take the places of the members of the obstreperous
organization, and the latter would usually be whipped into line.
The Council had always followed this policy of riding roughshod over
all opposition within its ranks and at times attempted, though not
so successfully, to pursue the same policy in its dealings with other
branches of organized labor in San Francisco. By the methods
described the Council was able to prevent impossible demands being
made by the unions affiliated with it. It watched matters very closely
in every part of the local building-trades field and thus prevented
many labor disputes that would otherwise have occurred. Whenever
labor controversies arose the Council made every effort to adjust
them by means of arbitration or otherwise. Although the constitu-
tion and by-laws of the Council made no provision for either con-
ciliation or arbitration, it frequently employed both methods for the
purpose of maintaining industrial peace.
The Labor Council also believed in, and always attempted to in-
duce its members to adopt, conciliation or arbitration in all labor
disputes. In all matters it tried to play fair with the employers.
It too was a powerful agency for industrial peace.
As has been noted above, the Building Trades Council as a central
organization, as well as its affiliated unions, did not stand committed
in any degree to a scheme of collective bargaining based on trade
agreements. Its constitution and by-laws contained no provisions
relative to the drafting of trade agreements or their use by either the
482 TRADE UNIONISM AND LABOR PROBLEMS
Council or its member unions. The officials of the Council claimed
that it and its member unions should be free and unhindered in their
right to change wages, hours, and conditions of employment when-
ever they desired to do so, and that a system of trade agreements
would make the exercise of that prerogative impossible.
Nothing so clearly shows the general attitude of the Council
towards this matter as the testimony of its president, Mr. P. H.
McCarthy, given before the U. S. Commission on Industrial Rela-
tions in San Francisco, September i, 1914. Upon being questioned
by Commissioner John R. Commons, he declared:
We do not believe in those signed agreements that have possession
of you Eastern gentlemen. We believe they are contrary to certain
conditions within the confines of this country. We believe that they
act as incentives to employers and employees alike, and create
trouble at about the time of the expiration of the agreement. Every-
body knows that they do.^
Time limits are very dangerous. Time limits act as incentives to
both parties to make certain demands.^
We will not sign time agreements, and we believe time agreements
are vicious, and we are not engaging in anything that is vicious.^
As a consequence of this policy, the Building Trades Council
was a party to but two agreements at the time covered by this study
(1915). One agreement, that with the Planing Mill Owners' Asso-
ciation, had been drawn up as early as February, 1901, and had been
amended and readopted from year to year. It had brought to con-
clusion a very serious labor struggle waged for the purpose of pre-
venting the use of imported unfair lumber. The other agreement
was that which had been drawn up with the Master Painters' and
Decorators' Association in June, 19 14, following a strike of the jour-
neymen painters for higher wages. Both agreements were the result
1 U. S. Commission on Industrial Relations, Final Report and Testimony,
Vol. VI, p. S2I2-
^Ibid. p. S2II.
^Ibid. p. S212. In May, 1917, however, the Building Trades Council sanc-
tioned an agreement drawn up in conference between representatives of the
Master Painters' and Decorators' Association and the local District Council of
Painters. This is the first instance of collective bargaining based on a trade
agreement that has been recorded in the building-trades world for many years
past; another agreement of similar character was entered into by these two
parties and approved by the Building Trades Council in August, 1906.
THE SAN FRANCISCO BUILDING TRADES 483
of arbitration proceedings. As President McCarthy declared before
the U. S. Commission on Industrial Relations, "Whenever the board
of arbitration is called in, then we request agreements and agreements
are signed up." Otherwise agreements were not resorted to.
The Building Trades Council thus stood committed to a policy
antagonistic to the use of trade agreements except in those cases
where arbitration proceedings were necessary to settle a controversy
between employers and employees.'-
The building-trades employers of San Francisco were very
thoroughly organized into various associations representing the in-
terests of particular groups of contractors. Thus in 191 5 there were
the General Contractors' Association, the San Francisco Lumbermen's
Club, the San Francisco Planing Mill Owners' Association, the Master
Housesmiths' Association, the Lighting Fixtures Club of San Fran-
cisco, the Master Roofers' and Manufacturers' Association, the Con-
crete Contractors' Association, the Furniture and Carpet Trades'
Association, the Sheet Metal Contractors' Association, the Master
Painters' and Decorators' Association, the Erectors' Association of
California, the Cabinet Manufacturers' Association of California,
the Masons' and Builders' Association of San Francisco, and the
CaUfornia Association of Electrical Contractors and Dealers. At
the time this survey was made (1915) all but the last two associa-
tions were affiliated with the Building Trades Employers' Associa-
tion of San Francisco.^
Neither the Building Trades Employers' Association nor any of
the above-mentioned associations engaged in collective bargaining
based on a system of trade agreements. They had been formed
primarily for trade purposes. At times a meeting might be held
in conference with representatives of a local union or of the Building
Trades Council, but this would usually occur after the employers
had been notified that a new wage scale was to go into effect or that
a certain firm had been declared to be unfair, or that a labor dispute
was threatened or had taken place, or after something else of a similar
nature had occurred or was about to occur. There were a few cases
1 Commissioner Commons : " Your method here is, you don't make written
agreements with the employer ? "
Mr. McCarthy : " Unless where arbitration boards are allowed in."
2 The Building Trades Employers' Association disbanded in 191 7.
484 TRADE UNIONISM AND LABOR PROBLEMS
of agreements' being signed between the individual employer and the
union, but such a practice was the great exception rather than the
general rule. Thus in 1915 the Bricklayers' Union had what was
known as a "reciprocal agreement," which fair contracting masons
and builders signed as individual firms. Undoubtedly there were a
few other scattering individual agreements which my investigation
failed to disclose, but they were found so seldom among the building-
trades unions as not to be considered of any consequence in determin-
ing the characteristics of the activities of the particular group of
trades under discussion.
The various employers' associations in the building trades did not
meet with the union or unions concerned or with representatives of
the Building Trades Council to discuss wages, hours, or conditions
of employment unless objections to the proposed scale of the union
were made by the employers. Mr. Grant Fee, president of the
Building Trades Employers' Association of San Francisco, in testi-
fying before the United States Commission on Industrial Relations
in San Francisco, September i, 19 14, declared :
There is no collective bargaining in this city, as I understand the
term. The system in vogue in this city is : The unions pass a so-
called law raising the scale of wages or changing the working condi-
tions ; that is referred to the Building Trades Council for their
approval ; if approved by the Building Trades Council, it is put in
force ; sometimes notice is given and again no notice is given in spite
of the fact that the Building Trades Council say that one of their
laws is that a ninety days' notice must be given before a change in
wage or working conditions is put into effect. The employer has no
voice whatever in making the above-stated rules ; the employer's part
consists in making what resistance he can ; this resistance has met
with no degree of success, excepting cases of housesmiths' trouble
in the matter of eight-hour day in structural shops. Collective bar-
gaining, as I understand the term, presumes discussion and consul-
tation by the parties concerned before agreements are made. Here
there is no such discussion. The so-called agreement is the ultimatum
of one party which the other party has no choice but to accept.^
iln a supplementary brief filed by Mr. Fee with that Commission he de-
clared that "they recognize their power, wielded by a collective demand, but
seldom, if ever, deal with any but individual employer unless forced to do so
by that employer's referring the demand made upon him to the employers' or-
ganization. And this in spite of the fact that the union well knows that the
employers have an active organization."
THE SAN FRANCISCO BUILDING TRADES 48S
Mr. McCarthy, at the same hearing, described in the following
manner the methods used by the building-trades unions in settling
conditions of employment : \
Me. McCarthy. As to the wage ?
Commissioner Wein stock. Take a hypothetical case. Suppose
the carpenters would decide that they are entitled to an increase, say
10 per cent of the present wage.
Mr. McCarthy. Yes.
Commissioner Weinstock. Will you explain to the Commission
what would be the method ?
Mr. McCarthy. The carpenters would take the matter up in
their district council, which embraces all of the carpenters within the
confines of the transbay cities. They would then send that out
to a vote of the carpenters. That vote would be tabulated and sent
in to the district council. If a majority, or two thirds, or whatever
this vote did run, the action called for would be tabulated. Then it
would be by the district council of carpenters approved and sent, if
occasion required, to the general office in Indianapolis for approval ;
but if it did not, that would be waived — in either event, if it was
sent first to Indianapolis it would then go to the Building Trades
Council of this city with which the carpenters are affiliated, the Build-
ing Trades Council of Alameda County, and then the Building
Trades Council would take the matter up with the General Con-
tractors' Association, the builders' exchange, with which some build-
ers doing carpenter work may be associated. We also communicate
with every independent contractor in this city who are'^ business
agents, and these men would be interviewed in that manner and the
subject drawn to their attention.
Commissioner Weinstock. . . . You would send them an official
communication ?
Mr. McCarthy. We sure would, because they have an association,
and [in the case of] all of those institutions you will find that [there
are] men in the same line [who] are not affiliated ; those men also
have a right to know and a right to pass upon a change of that kind,
and as a result our business agent takes the matter up with them.
Commissioner Weinstock. The point is not clear to me yet.
Mr. McCarthy. What is it that is not clear now ?
Commissioner Weinstock. Whether you say to the contractor —
whether you simply inform him of your conclusions, or whether you
leave it a debatable question.
^Evidently an error of the stenographer. Presumably "who are" should
read "through our."
486 TRADE UNIONISM AND LABOR PROBLEMS
Me. McCarthy. We inform him as to what action we have taken,
of course.
Commissioner Weinstock. That you have decided there shall
be a certain —
Mr. McCarthy. No sir ; we haven't done anything of the kind.
Don't get away with that. We have decided what we shall ask for,
and we are now drawing his attention to it, and those who are not
affiliated with us, to the end that if he feels the need of discussion
we will so take it up with him and discuss it with him. Mr. Fee was
not correct when he stated that we made laws for them. He knew
that he was not telling the truth.
Commissioner Weinstock. Then I am to understand that it is
left a debatable question?
Mr. McCarthy. Of course it is a debatable question. There is
nothing settled until it is settled by both parties.
In responding earlier in his testimony to a question asked by
Commissioner Commons, Mr. McCarthy declared that there was but
one agreement existing between the Building Trades Council and
the San Francisco Planing Mill Owners' Association. The following
discussion then took place :
Commissioner Commons. So that all other agreements are
simpty rules or plans or schedules, and so forth, submitted to them
and they sign them individually ?
Mr. McCarthy. No. They are entered into by mutual consent.
As outlined by myself here in the beginning, to wit : . . . [the union
adopts a schedule], it is passed up to the Building Trades Council,
referred by the Building Trades Council to the executive board, by
the executive board it is referred to the representative in the field,
and those representatives interview each and every individual in that
department, get an expression of opinion from them, and only in two
instances during the past fifteen years have a majority of those dis-
sented. . . . When they get a majority of employers in favor thereof,
at a regular meeting, they decide accordingly, and so notify the
employers.
Commissioner Commons. As a matter of fact, you recognize that
that is not what is usually called collective bargaining ?
Mr. McCarthy. As a matter of fact. Professor, I recognize that
that is what is collective bargaining.
Commissioner Commons. It is collective bargaining on your side.
Mr. McCarthy. On every side ; on my side and on their side.
Commissioner Commons. And individually on their side?
THE SAN FRANCISCO BUILDING TRADES 487
Mr. McCarthy. No. You are mistaken there, Professor. They
have their association. You are in error there. They take it to
their association.
Commissioner Commons. Do the representatives of your asso-
ciation meet the representatives of their association and jointly agree
upon all questions — wages, hours, and conditions?
Mr. McCarthy. . . . you haven't followed me.
Commissioner Commons. I thought I did.
Mr. McCarthy. . . . When the Council takes this [step], it
becomes the law, and then it is a subject of discussion, and not
before. . . .
Commissioner Commons. You do meet the employer?
Mr. McCarthy. Absolutely. If there is any objection, then we
meet. That is collective bargaining, just and correct.
It is clearly evident, not only froni the testimony presented
before the Commission on Industrial Relations by Mr. Fee and
Mr. McCarthy but also from data secured by personal investigation,
that collective bargaining based upon trade agreements, and that
trade agreements themselves except in case of dispute4 points decided
by an arbitration board, played no part in the activities of the
building-trades unions.
Testimony before the Commission on Industrial Relations as well
as personal interviews also disclosed the fact that there was wide-
spread complaint among the building-trades employers relative to
the arbitrary methods pursued by the building-trades unions in
connection with such matters as would customarily form the basis
for a scheme of collective bargaining. It may be that the arbitrary
methods employed by the Building Trades Council made possible its
unquestioned success in securing higher wages, shorter hours, and
better conditions of employment for its members than otherwise
might exist. But the fact should never be overlooked that the con-
tinued arbitrary exercise of authority and power inevitably causes
dissatisfaction and complaint.
Although the Building Trades Council had always opposed the'
adoption of trade agreements except in case of a disputed point
settled by means of arbitration, nevertheless when agreements had
been made necessary, the Council had uniformly lived up to the
conditions imposed and had compelled its member unions to do
488 TRADE UNIONISM AND LABOR PROBLEMS
likewise.^ The ability of the Council to enforce compliance with the
terms of such agreements had been due solely to the exercise of this
same arbitrary and dictatorial power above discussed. Without it
the Council would have been unable to have enforced obedience to
its mandates and would thus have degenerated into an ineffective,
uninfluential organization, not unlike the other trade councils with
which other unions of the Labor Council were affiliated.
Inasmuch as collective bargaining and trade agreements played
such an unimportant part in the life and activities of the Building
Trades Council, no discussion of the terms of the few agreements
that were in force in 1915 is deemed necessary.
Iba B. Cross
University of California
^In reciting the events that led up to the drafting of the agreement in the
painters' controversy in 1914, Mr. F. W. Kellogg, one of the arbitrators, made
the following significant statement before the Commission on Industrial
Relations at San Francisco, September 5, 1914 :
"Mr. McDonald of the Building Trades Council made a very fair statement
at our meeting on May 12. And he challenged the employers' association
[Master Painters' and Decorators' Association] to point to a single instance
where they [the building-trades unions] had broken an agreement after they
had entered into it. There was one or two answers to that that claimed that
they had broken their agreements in a minor way, but the final admission was
that the Building Trades Council had kept its agreements in this city."
(Commission on Industrial Relations, Final Report and Testimony, Vol. 6,
p. 5481.)
XXXII
PATTERNMAKERS' LOCAL AGREEMENTS, CHICAGO^
THE methods of bargaining employed by the Pattern Makers'
Association of Chicago are in many respects unique in the field
of trade-union experience. It is customary to look upon a trade-union
as an association that exists for the purpose of securing an agree-
ment with employers through collective action. The terms of such
agreements are ordinarily reduced to a written contract which governs
the conditions of service in respect to hours, wages, etc. for a specified
period of time.
While the Pattern Makers' Association has a scale, all contracts
are made with individual employers and the agreements are always
verbal. The officials of the Chicago association claim that they have
had but one strike in fourteen years, and that this dispute was
in reality a lockout rather than a strike. The strength of this
organization lies in three things :
1. Pattemmaking is highly skilled work.
2. The small number of men ordinarily employed in a shop. Four
or five men is the usual number found in a shop, although some shops
in the city employ as many as sixteen or eighteen men. The smaller
number of men usually involved in a grievance renders the financial
strain of maintaining these men till the dispute is adjusted less
severe than for most unions. The largest jobbing shop in Chicago
is one that the union itself assisted in establishing. The importance
of this shop to the successful operation of the methods employed
by this union will be described later.
3. Because the patternmakers are a small, compact group of
skilled workmen, organization can be made more easily effective.
The officers of the union estimate that there are about five hundred
patternmakers in the city of Chicago and that 95 per cent of these
are members of the union. On account of these conditions, and by
.iProm Annals, Vol. LXIX (1917), pp. 208-213.
490 TRADE UNIONISM AND LABOR PROBLEMS
means of apprenticeship and other rules, the union is able to maintain
a more complete control over the supply of labor and the conditions
of employment than is possible by many larger organizations.
In negotiating with employers the local association exercises a
large degree of freedom. The laws of the Pattern Makers' League,
the national union in this industry, do set some limits on the action
of local associations affiliated with the national union, but these
rules do not place a very strict limitation on local activity. The
most important rules of the League are those governing apprentice-
ship,^ those prohibiting members from working on piece, premium,
bonus, or contract work,^ and a declaration in opposition to strikes
and favorable to arbitration and conciliation as the best methods of
adjusting grievances.^ The rule governing the procedure in the case
of a grievance is as follows : The local association must, at a specially
called meeting, decide by a two-thirds vote of the members present
to lay their case before the employers involved. The Association
must then notify the general president, who, either personally or some
representative of the League delegated by him, proceeds to the scene
of the controversy and endeavors, in conjunction with the local exec-
utive committee, to effect a settlement. Failing in this, a local may
resort to a strike.* This rule of the League is of slight consequence
as a means of restricting independent local action. The only advan-
tage that would accrue to the local by complying with the rule would
be the strike benefits that the members would receive from the funds
of the national body. As the number of members involved in any one
dispute is so small, this rule can have little effect on the determination
of local policy, even in times of a dispute. The local could carry the
financial burden of a dispute, in case it saw fit to do so. However,
as stated above, it is contrary to the policy of the Chicago association
to engage in strikes. The League has another rule, prohibiting over-
time "except in cases of absolute necessity," = which means prac-
tically nothing. There are no restrictions on local action in respect
to wages and hours.
The wage scale of the Chicago Pattern Makers' Association varies
for different kinds of shops. Two principal kinds of shops employ
1 Constitution, Pattern Makers' League (1913), p. 19.
^Ibid. p. 22. *Ibid. p. 17.
^Ibid. p. 7. 5 Ibid. p. 22.
PATTERNMAKERS' LOCAL AGREEMENTS 491
patternmakers: First, the general manufacturing plant that main-
tains its own pattern shop. Some of these shops in Chicago may
employ only two or three men, while others may have as many as
fourteen to sixteen men. Second, the jobbing houses. Many manu-
facturing plants find it more economical to let contracts for their
patterns rather than to attempt to run a shop of their own. The wage
scale in the general manufacturing plants is 50 cents per hour. In
some of the jobbing shops the scale is as high as 60 cents per hour.'
Lack of uniformity is found likewise in regard to the hours of
work. Some plants work as few as eight hours per day, while others
work eight and one-half and some as many as nine hours per day.
The officers of the union stated that the patternmaking department
of the Illinois Steel plant works ten hours per day, but that this is
a nonunion shop and the conditions here are unusual.
The Chicago Pattern Makers' Association has a peculiar method
of controlling the wage scale and conditions of employment. For
many years, when new demands were made, the men were told by
the employers that the business could not stand the added expense.
The union officers had no positive evidence as to the accuracy of this
statement. At the present time, however, the officials of the union'
can know with reasonable accuracy what the cost of a patternmaking
department should be to the employer. This information is obtained
through the experience that the union has gained from its relations
with the American Pattern and Model Company.
This Company is incorporated under the laws of Illinois and has
been in operation now for a period of six years. The stockholders are
all members of the Chicago Pattern Makers' Association. The Com-
pany was formed by a subscription of shares on the following terms :
The shares were issued in denominations of $50. Any member of the
Pattern Makers' Association desiring to take out a share of stock in
the Company could do so by the payment of $5 down and $1 per
week until the face value of the share had been paid in. In this way
the plant became a cooperative undertaking, owned and managed by
members of the Pattern Makers' Association. This Company is in
direct competition with all other patternmaking establishments in
Chicago. In fact, it is claimed that this is the largest jobbing plant
^This scale does not include the wages paid in the American Pattern and
Model Company's shop, which is owned by members of the union.
492 TRADE UNIONISM AND LABOR PROBLEMS
in the city, as it employs between thirty and forty men. The shop
is run with strictly union labor, which is paid the best wages and is
given the shortest hours possible. The latest safety devices are used,
and the general conditions of employment are as satisfactory as they
can be made. The wage scale in this shop is 62^4 and 65 cents per
hour, according to the grade of work, for an eight-hour day, with a
half holiday on Saturdays. It is claimed that both wages and hours
are more favorable than in any other shop in the city.^
While this shop is a private corporation, the peculiar relation of
the union to its management gives the union a decided advantage in
its bargaining with employers in other shops throughout the city.
These advantages may be summarized as follows:
1. Reasonably accurate information concerning manufacturing can
be obtained. Should an employer state that he could not afford to
meet the demands of the men, the officers of the union would be
in a position to know whether or not the employer was making a
correct statement.
2. Should the employer refuse to accede to the demands, the men
could be put to work in the shop of the American Pattern and Model
Company. From the nature of this trade it frequently happens that
these same journeymen can go to the firm for whom they have been
working and secure a contract for the pattern work of this plant.
The firm has known the work of this journeyman, and, if the firm was
satisfied, very often the work will follow the journeyman. In this
way the journeymen may, in case of a dispute, actually increase the
work of the American Pattern and Model Company. While it is
true that the space controlled by this firm is limited, the officials of
the union point to the possibility, although it has never been done,
of renting additional space and of putting the men to work if con-
ditions in the industry should warrant it. Even if the men were not
put to work, they could be put on strike benefits. Whichever way the
matter is handled, the effect on the employer is the same, for since
the union has so large control over the skilled patternmakers, the
employer is practically forced to get any additional workmen through
1 The American Pattern and Model Company has constructed a new build-
ing at a cost of $20,000. This new building has greatly increased the space and
efficiency of its work. No dividends have been declared to date, as all of the
earnings have been put back into the plant and equipment.
PATTERNMAKERS' LOCAL AGREEMENTS 493
the union. New men will not be furnished except at the rates de-
manded. This explains why it is not necessary for the patternmakers
to strike.
The foregoing method can be used even though there is no dispute.
Whenever the union decides that any particular shop is paying less,
or working longer hours, than it should, the men may be withdrawn
and put to work in their own shop. When the employer calls for more
men, he is informed that the conditions as to wages or hours in his
shop are not satisfactory. He is told that if he expects to hold his
men, it will be necessary to pay a little more or to give his men
better conditions. In this way the union has used its relations with
the American Pattern and Model Company to improve working
conditions for its members.
The relation of the union to this Company gives the union a line
upon another problem in the industry. For a long time one of the
principal menaces to standard conditions was the small pattern-
maker who would underbid the union scale in order to get a job.
Having secured the contract, he would work long hours, and if he
required help on the job he would pay the lowest rates. More be-
cause of the hours worked than the wages paid, this small pattern-
maker was a disturbing factor to the industry. Two things are
accomplished through the American Pattern and Model Company
which are very useful to the union in its attempts to deal with this
problem. Some of these small jobbers are members of the union.
Frequently this fact is found out through the Company, in this way.
The Company has submitted a bid on a job and fails to secure it.
Being an interested party, the officials of the Company make in-
quiries as to who obtained the work. Thus members of the Pattern
Makers' Association who are inclined to break down union standards
may be detected and thereafter disciplined. In the second place, the
jobbers may undertake to cut prices for jobbing work with the view
of underbidding the American Pattern and Model Company and thus
driving the Company out of business. However, the Company has the
advantage in competition of this character, because it does not have
to earn a profit. The stockholders are more interested in continuous
employment than in the dividends declared on their shares. There-
fore this company can afford to take work at cost of production and
continue to operate indefinitely on that basis. Besides, the small
494 TRADE UNIONISM AND LABOR PROBLEMS
jobber cannot handle the larger orders, because he is not equipped,
either as to space or tools, for handling the larger work ; therefore
this kind of competition is restricted to the smaller jobs. The power
of the union through its connections with this Company, whether
considered in its relation to the small jobbing competitor or to the
employer unwilling to pay the scale, is in a large measure a potential
force. How extensively it is used depends upon the urgency of
the case.
In this unique way a small compact group of skilled workmen have
organized and carry on regular trade-union functions. Agreements
with the employer, while conforming to the normal representative
methods through union officials, are more completely individualized
than is usual in collective trade-union action. The agreement is
always verbal, and because of the character of the work it is fre-
quently in respect to a particular man. It may happen that only a
very few men are capable of making the kind of pattern specified.
But whether this be the case or not, the officer of the union is called
upon to furnish a specified number of men who are capable of doing
a definite kind of work. Through its connections with the American
Pattern and Model Company the union holds a strategic advantage
in its endeavors to protect and improve working conditions that is
possessed by few, if any, other unions in the country. No attempt is
here made to argue that the experience of this union can be extended
successfully to other organizations. The information is presented to
show what different methods may be employed by trade-unions as
aids in collective bargaining.
F. S. Deibler
Northwestern University
XXXIIl
THE SETTLEMENT OF DISPUTES UNDER AGREE-
MENTS IN THE ANTHRACITE INDUSTRY^
IN THE approaching conferences between the anthracite operators
and representatives of the mine workers on the renewal of the
agreement which expires on March 31, 1916, the method of settling
"grievances" arising during agreements has already been forecasted
as one of the most important questions. At the tri-district convention
of the United Mine Workers held last September at Wilkesbarre,
Pennsylvania, deniands were formulated which included the estab-
lishment of additional machinery for conciliation in each district, less
delay in the settlement of disputes, and the placing of such funda-
mental questions as detailed wage scales and conditions of work
within the jurisdiction of the conciliation machinery provided for
by agreements.^
The full significance of these demands cannot be appreciated
unless they are considered in their relation to the developments and
the tendencies that have been manifested in the history of conciliation
and arbitration of grievances since the award of the Roosevelt
Anthracite Coal Strike Commission was made in 1903. While this
award furnished the principles and the chief machinery for settling
disputes and grievances in the establishment of a Board of Concil-
iation for the entire Pennsylvania anthracite field, there have been
at least two important tendencies in the adjusting of grievances aris-
ing under the agreements made subsequent to the award. One is seen
in the development of additional machinery for conciliation of mat-
ters before they reach the Board of Conciliation. This development
iFrom Journal of Political Economy, Vol. XXTV (1916), pp. 254-283.
2 The "tri-district convention" is composed of delegates from the three dis-
tricts of the United Mine Workers of America in the Pennsylvania anthra-
cite field. This convention formulates and adopts a series of demands upon
the of)erators which later become the principal issues in the negotiations of
agreements.
495
496 TRADE UNIONISM AND LABOR PROBLEMS
has taken the form of methods by which questions can be settled
locally at the collieries or in the districts in which they arise.
The other tendency has been toward the settlement by the system of
conciliation and arbitration of matters of far greater importance than
were originally contemplated. This development has been due not
only to the fact that new and unforeseen questions arose, such as the
introduction of new coal-cutting machines, but also to the facts
that increasing emphasis has been given to matters that were within
the jurisdiction of the conciliation and arbitration system and that
greater confidence in the efficacy of such a system to settle disputes
has been felt. Among the effects of these two developments have
been a strengthened prestige and an increased membership of the
United Mine Workers in the anthracite field, an effective means of
educating immigrant workers in unionism and in collective relations
with their employers, and, apparently, a more firmly established
basis for collective bargaining in the industry.
Some of the more important features of the evolutionary develop-
ment of the conciliation and arbitration of disputes under the agree-
ments may be indicated by reviewing (i) the development of the
machinery of conciliation and arbitration of these disputes, (2) the
working of this machinery in practice, and (3) the general character
of the matters coming up for settlement as well as of the settlements
themselves.
I. THE DEVELOPMENT OF METHODS OF SETTLING DISPUTES
Two methods of adjusting disputes and grievances have been in
existence ever since 1903, when the award of the Anthracite Coal
Strike Commission was made. One method was conciliation, at first
by a bipartisan Board of Conciliation for the entire anthracite field,
and later by local and more direct agencies and means in addition to
the central board. The other method was arbitration by umpires
appointed by the federal circuit court in the anthracite section of
Pennsylvania. To these umpires are referred matters which can-
not be settled by the Conciliation Board. The method of conciliation
has undergone several important developments, while the method of
arbitration has remained practically unchanged since 1903. The
development of conciliation methods may therefore be reviewed in
some detail.
SETTLEMENTS IN ANTHRACITE INDUSTRY 497
As constituted by the Anthracite Coal Strike Commission's awards,
the plan of conciliation was as follows :
IV. The Commission adjudges and awards : That any difficulty or
disagreement arising under this award, either as to its interpretation
or application, or in any way growing out of the relations of the em-
ployers and employed, which cannot be settled or adjusted by con-
sultation between the superintendent or manager of the mine or
mines, and the miner or miners directly interested, or is of a scope
too large to be so settled or adjusted, shall be referred to a permanent
joint committee, to be called a Board of Conciliation, to consist of
six persons, appointed as hereinafter provided. That is to say, if
there shall be a division of the whole region into three districts, in
each of which there shall exist an organization representing a majority
of the mine workers of such district, one of said Board of Concilia-
tion shall be appointed by each of said organizations, and three other
persons shall be appointed by the operators, the operators in each of
said districts appointing one person.
The Board of Conciliation thus constituted shall take up and con-
sider any question referred to it as aforesaid, hearing both parties
to the controversy, and such evidence as may be laid before it by
either party ; and any award made by a majority of such Board of
Conciliation shall be final and binding on all parties. If, however,
the said Board is unable to decide any question submitted, or point
related thereto, that question or point shall be referred to an umpire,
to be appointed, at the request of said Board, by one of the circuit
judges of the third judicial circuit of the United States, whose decision
shall be final and binding in the premises.
The membership of said Board shall at all times be kept complete,
either the operators' or miners' organizations having the right, at any
time when a controversy is not pending, to change their representation
thereon.
At all hearings before said Board the parties may be represented
by such person or persons as they may respectively select.
No suspension of work shall take place, by lockout or strike, pend-
ing the adjudication of any matter so taken up for adjustment.
It will be noted that the award provided for ( i ) local conciliation
by superintendents or managers of the mines with the miners directly
interested, without however providing for any machinery for formal
methods; (2) conciliation, by a joint committee or board repre-
senting operators and workers of the entire industry, of disputes on
all questions which (a) cannot be settled locally and {b) are of too
great a scope to be settled locally, the majority decision of the board
to be final and binding.
498 TRADE UNIONISM AND LABOR PROBLEMS
The local settlement of disputes was merely inferential from the
provisions of the award, and no specific provision for such settle-
ment was made in any agreements until 1909. The Board of Con-
ciliation, however, early in its existence recognized the inference
in the 1903 award. At its organization meeting the Board provided
by resolution that grievances must, in the effort to secure settlements
without resort to the Board, be referred, seriatim, (i) to the foremen
of mines, (2) to company superintendents, and (3) to the two mem-
bers of the Board in the particular district, who must first confine
their efforts to getting the operators concerned to see the complainants
and consider the grievance.^ The object of this resolution was to
compel the employer to deal directly with the complaining employee,^
as well as to secure as large a number of local settlements of disputes
as possible. This resolution was in force for six years and was the
forerunner of the following provision of the agreement of 1909 :
Any dispute arising at a colliery under the terms of this agreement
must first be taken up with the mine foreman and superintendent by
the employee, or committee of employees directly interested, before
it can be taken up with the Conciliation Board for final adjustment.
Still no local machinery was definitely provided for the settling
of disputes, the employers insisting on dealing with their employees
as directly as possible and without recognizing the union to such an
extent as to concede a provision for permanent or regularly constituted
committees representing the local bodies or organizations of mine
workers. The question of the convenience of local conciliation
methods thus became involved in the question of recognition, and
the status of conciliation as fixed in 1903 underwent no material
change until 1912.
The mine workers in 1912 made a specific demand for "a more
convenient and uniform system of adjusting local grievances within
IF. J. Wame, "Trade Agreement in the Coal Industry," Annals, September,
1910, pp. 91-92.
2 This procedure had already been provided for so far as the union was con-
cerned by the constitution of the United Mine Workers of America, which pro-
vided that whenever any dispute arises between the members of a local union
and their employers it is the duty of the ofBcers of the local union concerned
to endeavor to bring about a settlement by peaceful means. If amicable
methods fail, then the local union ofBcers may notify the district officers. If
the district officers fail to bring about a peaceful settlement, they may order a
strike. See Article X, Section i, of the constitution.
SETTLEMENTS IN ANTHRACITE INDUSTRY 499
a reasonable time limit." The agreement of 191 2 contained the
following provision:
(d) At each mine there shall be a grievance committee consisting
of not more than three employees, and such committee shall under
the terms of this agreement take up for adjustment with the proper
officials of the company all grievances referred to them by employees
who have first taken up said grievance with the foreman and failed
to effect proper settlement of the same. It is also understood that the
member of the Board of Conciliation elected by the Mine Workers'
organization or his representative may meet with the mine committee
and company officials in adjusting disputes. In the event of the mine
committee failing to adjust with the company officials any grievance
properly referred to them they may refer the grievance to the mem-
bers of the Board of Conciliation in their district for adjustment,
and in case of their failure to adjust the same they shall refer the
grievance to the Board of Conciliation for final settlement, as pro-
vided in the Award of the Anthracite Coal Strike Commission and
the agreements subsequent thereto, and whatever settlement is made
shall date from the time the grievance is raised.
It will be noted that the above clause provided for two additional
steps in conciliation intermediate between the direct settlement of
disputes by local mine managers or superintendent and employee
or employers interested and the reference of disputes to the Con-
ciliation Board, as follows:
1. Reference to grievance committees of employees at each mine,
the committees to deal with the officials of the company owning
the mine ;
2. References to the two members of the Board of Conciliation of
the district, one of whom, according to the system already in exist-
ence, represents the employers and the other the workers.
Since 1912 a new feature has been evolved in the form of "general
grievance committees" composed of representatives from local com-
munities. These committees exist among the employees of certain
companies, notably the Delaware and Hudson, in some sections of
the field, and among the employees of an entire section, as in the case
of the Schuylkill region. They are not provided for in the agreement
and are not recognized by the Board of Conciliation. Their origin
seems to have been in the work of local grievance committees which,
according to the terms of the 19 12 agreement, met with company
officials within sixty days after the agreement was signed, to prepare
500 TRADE UNIONISM AND LABOR PROBLEMS
statements "setting forth the rates of pay to be certified to the
Board of Conciliation." For purposes of convenience, it appears,
certain companies met with representatives of all the local grievance
committees from their own collieries, and these representatives after-
ward undertook to become separate entities. They first attempted
to make new adjustments in the wage scales involving changes in
the system of differentials, and later tried to deal collectively with
general questions affecting the mine workers. Not only were they
not recognized by the employers and the Board of Conciliation, but
their existence has been fought by the leaders of the union. In the
1 9 14 convention, for example, of the United Mine Workers in Dis-
trict No. I the question occasioned a good deal of strife and the
union was well divided. It appears to be clear that those who were
critical of the administration in the union were disposed to side with
the advocates of general grievance committees arid that the con-
troversy assumed a somewhat political character within the union.
Whatever may have been the influence of this faction in shaping
the 1915 demands, it is significant that in addition to a demand for
"more simplified and speedy methods of adjusting grievances"
there is now a demand for conciliation of questions involving the
" arrangements of detailed wage scales and the settlement of internal
questions both as regards prices and conditions" by reference to
"the representatives of the operators and miners of each district."
If the last-named demand is acceded to, not only will the machinery
for the adjustment of disputes under the agreement be enlarged but
the assignment of the larger questions involving wage rates and
conditions of work to the field of its jurisdiction will greatly add to
the importance of the local adjusting bodies.
II. THE CONCILIATION AND ARBITRATION PLAN
IN PRACTICE
The actual operation of the machinery of settling disputes and
grievances arising under agreements may be reviewed briefly under
the following heads: (i) the conciliation plan in practice, (2) the
arbitration plan in practice, and (3) cessations of work occurring
during agreements.
I. The conciliation plan in practice. With the plan of concilia-
tion, as it has developed up to the present time, in inind, its work
SETTLEMENTS IN ANTHRACITE INDUSTRY Soi
in actual practice suggests several points for special consideration.
Among these are the appellate principle in the reference of matters
coming up for settlement, the tendency toward settling disputes as
near to the point of impact as possible, the frequency of disputes
and grievances, the effects of conciliative methods on the numerical
strength of the union, the relation of the immigrant mine worker to
the conciliation plan, and the importance of the personal equation
in settling disputes under the conciliation plan.
a. There are no provisions concerning appeals from decisions made
at any point in the series of references except the provisions setting
forth the finality of the decisions of the Board of Conciliation and
of umpires. From the decisions of the Board and of the umpires,
according to an explicit provision in the 1903 award and in the
subsequent agreements, no appeals can be made, although on one
occasion an appeal was made, with the consent of both sides, to a
member of the federal judiciary for the settlement of a question on
which an umpire and the operators' representatives on the Concilia-
tion Board disagreed. This, however, was an extraordinary case for
which no provision had been conceived. While there is provided a
method of progressive reference of disputes, starting at the point of
impact at the colliery itself and ending with an outside umpire named
by an outside authority, the possibility of judicial review is very
slight. There are three points in the series of references where dis-
putants can present their case to a third party — the district Board
members, the Conciliation Board, and the umpire — and where the
element of review and of adjudication seems to exist. At the two
other points — the complaining employee and mine boss, and the
grievance committee and the company official — there is no review
or adjudication whatever. But even where the first two steps in con-
cihation fail and the matter in dispute goes to the two members of
the Conciliation Board, it does not go as a case on its merits, but as
a matter which the two Board members, with their knowledge of
the attitude and of the precedents of the whole Board, may be able
to settle. Furthermore, even the Board itself is frankly regarded as
bipartisan, and while the disputants present their cases in a formal
way to the Board for a decision, the element of conciliation is in-
tended to be predominant. In other words, the entire series of refer-
ences up to the umpire is a series of attempts by representatives of
502 TRADE UNIONISM AND lAbOR PROBLEMS
both sides to a dispute to settle out of court rather than in court, and
it is taken for granted in all of the steps in this series, and expressly
provided in one, that when a settlement is made it is final because
it is a real settlement of the dispute.
The fact that certain precedents have grown up in the Board of
Conciliation in the settlement of certain disputes does not essentially
invest the Board with judicial authority, although it may be an
evidence of a judicial habit. The entire plan of settling disputes
under the agreement, therefore, is so constructed as to eliminate, as
far as possible, the element of arbitration, or of judicial review, by
any other kind of body than a strictly equipartisan one, except as
a last resort.^ The appellate principle is strikingly absent, so far
as the form of reference of disputes is concerned.
At the same time, it must be remembered that the average in-
dividual mine worker naturally looks upon the entire process of
settling disputes as a series of appeals from the decisions of his
employer or of his employer's representatives. He has been ac-
customed to look for compulsion from this employer, and at one
time his only method of appeal from his employer's decision was the
strike. The new method of "conciliation" is to him a means by
which he can refer his employer's decision to some other authority.
The extent to which the agreement is an actual contract between
employer and employees is the measure of the correctness of
his view.
b. Provision for methods of conciliation has naturally resulted
in a large number of separate disputes and matters coming up for
conciliation. While no statistics are available for the years prior
to 1903, there is evidence that for a number of years prior to the
general strikes of 1900 and 1902 labor disputes were few and far
between and grievances were rarely aired.^ Since the 1903 award
iThe testimony of John Mitchell at the Washington, D. C, hearings of the
U. S. Commission on Industrial Relations showed very dearly his opposition to
the submission of differences to a third party. Mr. Mitchell was the mine
workers' representative before the Anthracite Coal Strike Commission, whose
awards laid the basis for the present plan.
2 Assertions to this effect have been made by operators at various times. See
Report of the Anthracite Coal-Strike Commission and proceedings of confer-
SETTLEMENTS IN ANTHRACITE INDUSTRY 503
went into effect, the number of complaints submitted to the Board
of Conciliation, by years, has been as follows:
Year
Number of
Complaints
Year
Number of
compiaints
1903
1904
I90S
1906
1907
1908
107
16
16
8
7
9
1909
1910
1911
1912
1913
8
IS
s
3
SI
The large number of grievances coming up immediately after the
award went into effect and the increases in 19 10 and 1913 following
amendments to the award are significant. Many of these cases were
caused by the need for interpretation of the awards and the new
agreements ; others were due to the fact that outlets for grievances
were provided, especially in the case of the 1903 award and the 19 12
agreement.^ But the foregoing statistics do not exhibit the actual
number of grievances, since they do not include those which are
settled without reaching the Board. Unfortunately no records are
kept of grievances and disputes which are settled without reference
to the Board or umpires, but it is asserted by members and officials
of the Board that their number has greatly increased since 1912.
c. The foregoing considerations suggest a tendency toward stopping
disputes near or at the point of impact. Aside from the creation of
new -local machinery by the 19 12 agreement, and aside from the
concomitant provision for reference to the two district members of
the Conciliation Board before reference to the entire Board, the con-
ciliation work of individual members of the Board before 1912
showed a considerable growth. An increasing proportion of griev-
ances, it has been stated by members of the Board, never reach the
Board, because they are settled either by the union member of the
^The mine grievance committee was characterized to the writer by labor
leaders as a benefit to the worker, because local machinery was thereby
afforded by which a worker could present a grievance and have it settled
without going to the Conciliation Board, and by which the opportunity for
the settlement of grievances was made greater than ever before. It is natural,
therefore, that the opportunity should be taken advantage of.
504 TRADE UNIONISM AND LABOR PROBLEMS
Board or by the two members of the Board in a district. The pro-
vision of the 19 1 2 agreement referred to above was, therefore, little
more than a formal recognition of the work of these conciliators.
It is a significant fact, perhaps, that the number of grievances settled
by agreement, usually by members of the Board in the district in
which the grievance originated, was much larger proportionately from
1909 to 1912 than from 1903 to 1906, as the following table shows:
Disposition of Grievances brought before the Anthracite Board
OF Conciliation, 1903-1912
Disposition of Grievances
Complaints on which the Board took no action :
Settled by agreement of both parties . .
Withdrawn by complainant
Refused by Board
Complaints decided by the Board :
Employees sustained
Employers sustained
Complaints going to umpire and decided :
For employee
For employer
Total
Ncjmbrr brought up in
1903-1906 1906-1909 I909-I9TZ
143
14
3
53
7
5
• • •
31
7
19
2
6
3
15
4
26
26*
* About six in all were pending when the report of the Conciliation Board was published.
Thus 10 per cent of the grievances presented to the Board in 1903-
1906 were disposed of by means of settlements by agreement of
operators and mine workers immediately concerned, 12 per cent in
1906-1909, and over 28 per cent in 1909-1912.
d. The creation of machinery for the local conciliation of disputes
has unquestionably aided the rapid growth of the union since 19 12.
Confidence in the ability of the organization to obtain the settlement
of specific grievances arising at the collieries has resulted^ and
membership in the union has meant tangible benefits to the mine
worker. This effect has been much greater under the 19 12 agree-
ment than under the preceding agreements, because of the provision
for colliery grievance committees. The grievance committee is both
an inducement to the mine worker to join the union in order to gain
SETTLEMENTS IN ANTHRACITE INDUSTRY 505
the benefit of collective action on matters of local interest, and a
weapon which the union organization uses to force him to join.
No provision was made as to the manner in which the grievance
committees are to be selected. There is reason to believe that such
a provision was purposely omitted, since it would involve more or
less formal recognition of the union local. In practice the committees
are chosen by the union local and have refused to take up grievances
of nonunion workers ; in fact, it has been asserted that this is the
usual procedure, and that the mine committees are nothing more
than an active auxiliary to the union campaign for membership and
the " button strike " method of compelling nonunion mine workers to
join the union. There seems to be no doubt that the mine grievance
committee has had the effect of aiding the unusual increase in union
membership since 1912. The practical recognition by the employers
of local bodies representing the local unions was certainly a factor
of great importance in stimulating the immigrant mine worker to
join the union, because it enabled him to see with his own eyes a
concrete piece of industrial machinery which stood ready to take up
his grievance and if need be to carry it "higher up" for adjustment.
It was natural, therefore, that he join the union in order to acquire
a standing before the committee ; if he did not join, he would face
the opposition of the committee when he had a grievance to be aired.
e. The accusation that there has been more delay in the settlement
of disputes than is necessary has been frequently made by mine
Workers. How far avoidable delay occurs is difficult to determine.
Data relative to the length of time required to settle disputes' under
the agreements are incomplete for two reasons : ( i ) the date on
which action was taken by the Conciliation Board in cases referred
to it is usually not given in the reports; (2) no records are kept
of the disputes which do not reach the Board. The report of the
Conciliation Board for 1903-1906 gives a recapitulation which is
complete, but this is not given in subsequent reports. Following are
the data for 1903-1906 under the awards r'^
Hearings or Action taken within Action of Umpire within
One month 44 Two months 2
Two months 69 Four months I
Over two months . . . . 37 Seven months I
^Report of Board of Conciliation for Three Years Ending March 31, 1906,
P- 335-
So6 TRADE UNIONISM AND LABOR PROBLEMS
While no records exist of the grievances referred to mine com-
mittees under the 19 12 agreement, it appears to be generally thought
that disputes have been settled by the new plan of conciliation with
less delay than formerly. Frequently the first step in conciliation,
the effort to settle differences by direct conference between mine boss
and complainants, is omitted and the grievances are first brought by
the mine committees, and usually these grievances are promptly
settled, unless they are referred, by a conference of committee and
company officials. The 19 12 provision permitting the union member
of the Conciliation Board for the district to sit in these conferences aids
in the prompt settlement of disputes, since the Board member knows
pretty well what the prospects for a successful reference of a dispute
to the Board are, and he advises the committee accordingly. His
knowledge of precedents also serves to guide the settlement of local
grievances. The conciliation work of the two members of the Board
from the district in which a grievance originates serves to prevent
delay by bringing about settlements without reference to the Board.
More businesslike methods of procedure also have served to lessen
the time required for final action on a grievance. The Board of
Conciliation meets regularly twice a month. In 1914 ninety meetings
were held for the disposition of grievances, besides frequent con-
ferences between the two district members of the Board and be-
tween the individual members and the grievance committees and
complainants.
Under the present methods it does not seem that there is un-
warrantable delay in obtaining decisions on matters coming up for
settlement. The members of the Board of Conciliation have other
duties than those attached to their office. The cases coming up
before the Board frequently require the taking of lengthy testimony,
and the evidence must be carefully digested before a decision can be
made. Many trivial cases consume the time at the Board's disposal.
In some instances the decisions require more than one conference;
the matters involved are often questions on which careful interpreta-
tions must be made or actual conciliation is needed. In fact, it
appears to be true that most of the cases of apparent delay are not
so much the fault of the Board of Conciliation as of the character
of the cases themselves. Frequently where a grievance is brought
up which is without sufficient basis it is not pressed. Either it is
SETTLEMENTS IN ANTHRACITE INDUSTRY 507
postponed in order to secure further evidence or else it is not withdrawn
and is allowed to stay on the " docket," because a member of the Board
does not wish to confess to his constituents that he has not been
able to secure favorable action ; hence the Board is blamed for de-
laying action. The realization that less delay can be brought about
only by additional conciliation machinery is clearly manifested in
the mine workers' 1915 demands.
/. The attitude and the character of those who compose the Board
of Conciliation and the local grievance committees are an important
factor in the settlement of matters under the agreements. This is
inevitably so, for several reasons, although the effect of- the "personal
equation" cannot be statistically stated. The members of a Board
of Conciliation which meets regularly and frequently to pass on
questions that often involve the same general principles learn to
know each other personally and to understand in an intimate way
the position, with reference to their constituencies, in which they are
placed. The character of the grievances coming before the members
of the Board, and even their disposition, depends a good deal on this
personal element. In one district the members of the Board repre-
senting the employers and the union may understand each other
better than in another district and work together with greater facil-
ity. In another district the union member of the Board may be in-
clined to be a union "politician" and to insist on points that will
increase his prestige with his constituents. This will result in some
friction and appears to hinder rather than help conciliation. A trivial
case may be pushed more because of the publicity it happens to get
than because of the importance of the principle involved. For ex-
ample, a breaker boy was discharged by a company for some in-
fraction of the rule. After eight days the boy found employment in
a mill at better wages than he was getting on the breaker. A griev-
ance was presented on the ground that the boy was unjustly dis-
charged. The boy did not want to return to the breaker, because he
was getting better wages than he had as a breaker boy, but the issue
was made on payment of his wages for the eight days he was idle.
The principle' that a discharged worker ought to be paid for time
lost if he lost it through no fault of his own had long been estab-
lished, so that in this case the fundamental principle was not at
stake, but his wages at a dollar a day. The attitude of the district
So8 TRADE UNIONISM AND LABOR PROBLEMS
union member of the Board was such as to cause the grievance to be
brought before the whole Board, where it was necessary to hear a
large amount of testimony and to take up a half day's time of the
Board. The question involved had its right or its wrong, of course,
but the inability of the two members of the Board to adjust so small
a matter was probably due to the desire of one of them to gain sup-
port for himself among his constituents. An employer member of
the Board may likewise be so great a stickler for technicalities that
friction may continually result. In another district the two members
may work together well, rarely present a case for decision by the
Board, and never do so unless it involves a new issue or a new inter-
pretation of the agreement. The opinion has been expressed that
the union member under such circumstances has been able to gain
more concessions on account of his personality and his attitude than
other union members of the Board.
While the personal element cannot be accurately measured, one
cannot but be impressed with its importance in the actual work of
the Board of Conciliation as a whole, and particularly in the work
of its members. The longer the process of conciliation goes on, the
greater seems to be the importance of the "personal equation," es-
pecially in the settlement of matters by local conciliation and by
the district Board members. Even the origin of grievances is affected
in this way. At some collieries are the aggressive individuals — the
"trouble makers" — in the leadership of the local union, and at these
collieries grievances occur with so much greater frequency that their
real cause cannot be doubted. It has been said that if the local
grievances could be charted* on a map of the anthracite field, it would
be seen that in certain sections, and particularly at certain collieries,
the grievances would be concentrated, while other collieries — the
majority — would receive no distinguishing mark. And while the
natural tendency is for the personal element to be discounted by
the Conciliation Board, its bearing on the general problem of
industrial relations and their adjustments is great, even if indefinite.
g. The fact that the newer immigrant races compose so large a
proportion of the anthracite mine workers is an element of great
importance in the operation of the conciliation plan. The inexperi-
ence of this group of workers in collective bargaining, their ignorance
of American points of view, of the real issues at stake, and of the
SETTLEMENTS IN ANTHRACITE INDUSTRY 509
purposes and aims of unionism, and the characteristics peculiar
to the various races represented have injected into the situation
elements so complicating as to menace at times the success of the
work of conciliation. In spite of what naturally appear to have
been insuperable obstacles, however, it may be confidently said
that the conciliation plan has been fairly successful in dealing
with the immigrant and that the immigrant has gradually been edu-
cated in its aims and methods to a far greater degree than would
be expected.
Roughly speaking, about 80 per cent of the United Mine Workers'
organization in the anthracite field is composed of Polish, Italian,
and Rumanian immigrants. This large proportion has been secured,
so far as active organization by the union is concerned, by employ-
ing organizers of different nationalities ; by printing the union con-
stitution, by-laws, and rules of procedure, and the agreement, in the
different languages ; by allowing immigrants to hold important offices
in the local unions and even in the district organizations ; and by
the enforced payment of dues through "button strikes" and the
work of the grievance committees. Either the president or a vice
president of nearly every local is of one of the nationalities of newer
immigrants, and he is intrusted with the duty of translating the
debates and rulings for the information of members who cannot
understand English. It seems to be true that the newer immigrants
are inclined to have a passive attitude toward the activities of the
locals and the union organization, but as they become more Amer-
icanized they gradually take a more active part. Not only are they
prominent among the officers of the local and district organizations
but they are active members of grievance committees, constitute a
large proportion of the delegates to the district and joint-district
conventions, which determine the policies of the union in collective
bargaining, and have been on the conference committees to meet
the operators. That their increasing strength and influence in the
union is regarded with apprehension by some of the natives and of
the older group of immigrants is not disguised. At the same time,
it is also recognized that the longer the experience the immigrant
has, the more conservative he becomes and the more inclined he is
to work with the element which has been in control of the policies
of the union.
Sio TRADE UNIONISM AND LABOR PROBLEMS
The position which the newer immigrant has attained has not been
without difficulty, both on his part and on the part of the older and
native element, or without perils to the cause of unionism. The
emotionalism of the newer immigrant, his ignorance, his totally dif-
ferent point of view, and his frequent inability to see the larger
issues at stake beyond trivial or merely personal grievances have been
serious obstacles to conciliation. The tendency on the part of the
newer immigrants to take quick group action on matters on which
the individual would hesitate perhaps even longer than the older
immigrant or the native, has been and is another difficulty. For
example, newer immigrant individuals have been interviewed, when
a grievance was pending, with regard to their attitude and their
understanding of unionism and the trade agreement and have shown
an understanding and appreciation that were umnistakable. On the
very evening of the day they were interviewed they have been among
the first to shout " Strike ! " at a meeting of their local where the
grievance was aired. Counterbalancing these characteristics and
tendencies, however, is the willingness of the newer immigrant to be
led by members of his own race who are in sympathy with conserva-
tive policies. Sometimes it is necessary to make an emotional appeal
to him on the grounds of loyalty to the union ; at other times calm
reasoning will be sufficient, especially if he can be dealt with in-
dividually. Accustomed as he has been to a sort of feudal relation-
ship to his landlord in the country of his birth, the basis of which
was the opportunity to obtain assistance in times of distress, he now
looks for guidance to the older immigrants of his own nationality.
His unionism, while emotional, is at the same time personal. Without
the influence of the leader of his own race an agreement would have
little weight and conciUation would have small meaning ; he would
either become a rampant radical or he would be a serf. But under
the influence of conservative leaders he is becoming educated in the
point of view which is necessary to collective relations with the
operators. Unionism in the anthracite field has become an effective
factor in assimilation, breakfng down racial solidarity, training the
newer immigrant in conservative action, and bringing him in close
touch with natives and older immigrants. This fact is strikingly
apparent to anyone who has had the opportunity to observe the
situation during the last few years.
SEftLEMENtS IN ANTHMCITE INDUSTRY 51 1
The operators, while complaining that the mine workers themselves
— especially the "foreign" element — have not been capable of
collective action, particularly where they are allowed to act directly
through colliery grievance committees, are appreciative of the difficul-
ties of the union leaders in controlling the newer immigrants and
have made concessions with the specific purpose of enabling this
control to be more completely exercised. They are disposed to look
upon the efforts of the union leaders as sincere, and at least some
of them are willing to lessen and even to remove what has been an
obstacle of their own making, the absence of formal and complete
recognition. For if a closed shop could be authoritatively main-
tained, the control of the newer immigrant element would, it is
claimed by union leaders, be very much more easily accomplished
and collective relations would be more solidly established.
Thus, under the conditions which are found actually to exist, and
with the forces at work, there is a tendency of an unmistakable kind.
The longer the immigrant stays, the better educated he is in collective
bargaining, the more amenable he is to American procedure, and the
clearer is his conception of his responsibilities. He does not seem
to have injected any permanent radicalism into unionism in the
anthracite field. The I.W. W. movement never succeeded in gain-
ing a foothold, for example. The immigrant mine worker seems to
be assimilating the ideals and the philosophy of the unionism that he
finds, rather than molding or changing them in any appreciable degree.
2. The arbitration plan in practice. The method of arbitration
of disputes provided by the anthracite Strike Commission in its
1903 award was set forth as follows :
If, however, the said board [Board of Conciliation] is unable to
decide any question submitted, or any point related thereto, that
question or point shall be referred to an umpire, to be appointed, at
request of said board, by one of the circuit judges of the third ju-
dicial circuit of the United States, whose decision shall be final and
binding in the premises.
This method has remained without change under the subsequent
agreements. The umpire is chosen for each case as it comes up, and
the contingency of a deadlock in choosing an umpire is prevented
by having his appointment in the hands of a federal judge in the
anthracite section. In practice, however, both parties are consulted
512 TRADE UNIONISM AND LABOR PROBLEMS
and as a rule have been able to agree on the man to be named, and
the choice has been so closely confined to three men — former United
States Commissioners of Labor Carroll D. Wright and Charles P. NeiH
and former United States Circuit Judge George Gray, all of whom
were connected in official capacities with the Strike Commission —
that the principle of permanent umpires may be said to have been fol-
lowed. The first two named were national ofiicials while acting as
umpires, except in the case of Dr. Neill, who was employed as umpire
for several years after his resignation as Commissioner of Labor.
Furthermore, all of them may be considered expert arbitrators, es-
pecially Dr. Neill, whose experience in this line has been extensive
and varied.
A rather unusual situation occurred in 1904, when reference was
made to Judge Gray, then of the United States Circuit Court, after
Umpire Wright had given a decision. The question arose in 1903
whether deductions could be made from the wages of all of the miners
at a colliery for the payment of checkweighman or check docking
bosses when only a majority of the miners had petitioned for the
installation of weighmen or bosses. The Board of Conciliation de-
cided, in July, 1903, on a case presented to it, that checkweighmen
or check docking bosses should be installed when a majority of the
miners petitioned, but that collections for paying their salaries or
wages could be made only from those miners who consented. In
October, 1903, the question came up again to the Board in another
grievance case in which it was claimed that certain operators had
refused to collect a certain sum from each miner for the payment of
weighmen or docking bosses. The Board divided on this occasion,
and the question went to an umpire. Umpire Wright did not sustain
the grievance as it was presented ; he made rulings that sustained
the contentions of the complainants. The operators' representatives
on the Board, however, claimed that the umpire had no authority to
reverse a decision of the Board. As a way out of the difficulty, the
interests represented on the Board agreed to submit the interpretation
of the award to Judge Gray, agreeing to abide by his decision, whether
it meant discharging the umpire's rulings or rescinding their own
decision of July, 1903. Judge Gray, after a lengthy review of the
case in all of its aspects, interpreted the award in the same way as
Umpire Wright.
SETTLEMENTS IN ANTHRACITE INDUSTRY 513
The distinctly arbitrative nature of this reference is seen, -first,
in the fatt that the representatives of mine workers and of operators
had clashed and deadlocked, and, second, in their agreement to abide
by the opinion of Judge Gray even if his opinion should be con-
trary to the umpire's decision. In other words, the situation was
a peculiarly critical one. While the technicality of the authority of
an umpire to reverse a decision of the Board was introduced, the
real question was fundamentally similar to that of the check-off.
The creation of a miners' fund by deducting a specified sum fixed
by a majority of the miners and the precedent of deducting it from
all the employees' wages at the demand of those employees who were
members of the union locals were looked upon as constituting a
dangerous precedent. It was an instance where the plan of con-
ciliation and arbitration broke down and where it was necessary
to create new, although temporary, machinery to bring about a
settlement.
This was, however, the only instance of its kind.
3. Cessations. The number of cessations of work cannot be
exactly determined prior to 1913, nor can cessations be distinguished
from suspensions incident to the making of agreements in those years
in which agreements were made. In other years, however, the num-
ber of cessations was inconsiderable except for 19 13. The statistics
in the table below show the number of men on strike, the days
lost from work, and the average days lost per striker in the years in
which agreements were not made. In cases where "None" appears,
Year
Number of Mhn
ON Strike
Total Days Lost
FROM Work
Average Number of
Days Lost per Man
ON Strike
190I
'903
1904
1905
1906
1908
I910
I911
I913
1914
None
None
2,228
4,998
None
None
2,853
5,900
64,086
26,115
None
None
34,103
33.986
None
None
15.739
36,958
481,678
179,743
None
None
15
7
None
None
6
6
8
7
514 TRADE UNIONISM AND LABOR PROBLEMS
either there were no cessations at all, or the number was so slight
that it was not included in the tabulations of the United States
Geological Survey.
From the above it will be seen that the cessations from 1901 to
191 1, inclusive, were inconsiderable. They were in the form of local
colliery strikes of short duration and were caused by local disputes
over local questions, according to statements of union officials and
the mine operators. The United States Geological Survey reports
no cessations at all in 1901, occasional cessations of short duration
and having little effect on coal production in 1903, and only five
small strikes in 1904.
In 19 10, the year after the 1909 agreement for three years had
been consummated, there were stated to be a few cases of temporary
shutdowns because of labor, difficulties. Only one instance occurred
in which the idleness extended over twelve days, most of the troubles
lasting from one day to one week. Some idea of their causes may be
gleaned from the complaints made by operators to the Conciliation
Board and the employees' answers. Only six of these complaints
were made from 1903 to 19 12 and in four of them the causes are
shown as follows :
May, 1903 — Demand of men that pay days be unchanged.
July, 1903 — Demand of men for increased pay, the issue being an
interpretation of the 1903 award.
August, 1904 — Demand of men to test coal scales at mine.
February, 1907 — Refusal of men to clean coal.
The cessations in these instances lasted a few days, with the
exception of the second one named, which lasted four months and
involved 60 men.
Under the 19 12 agreement the cessations have been more numerous
than under the award or the previous agreements. According to the
report of the Bureau of Anthracite Coal Statistics^ the suspension
pending the making of a new agreement, which lasted from April i
to May 20, 1912, accounted for all of the idle days caused by strikes ;
hence it must be assumed that no cessations of work occurred. In
iThis Bureau furnished the data on the anthracite coal field to the United
States Geological Survey, from which the foregoing statement is taken (Produc-
tion of Coal in 1912, p. 42).
SETTLEMENTS IN ANTHRACITE INDUSTRY 515
1913, however, 64,086 men were on strike, losing 481,678 workdays,
or an average of 8 days per striker. There were strikes at ninety-
three different mines during the year. In 19 14 the number of strikes
was smaller, less than one third as many men were involved, and the
■average duration of the strikes was less. In 1915 the colliery strikes
have, according to unofficial data, shown a considerable increase.
While the United States Geological Survey does not class these
strikes as " serious interruptions " from the standpoint of production,^
they were regarded as extremely annoying by many of the operators
and as evidence of inefficiency in the new conciliation machinery
introduced by the 1912 agreement. They were of two kinds, petty-
grievance strikes and "button strikes."
a. Petty-grievance strikes appear to be due to one of two causes
when conditions at a colliery bring about dissatisfaction. The local
union may be influenced by a radical or emotional leader to strike
without employing the conciliation machinery provided by the agree-
ment. The local union itself may be controlled by an excitable
element and force its leader to agree to a strike. The former cause
is believed by the operators to be the most frequent cause of petty
strikes of this character, while labor leaders ascribe them chiefly to
the presence of immigrant workers. There seems to be ground for
the validity of both explanations. In the one case, the frequency
of grievance strikes at certain collieries where, it is claimed, leaders
of the types referred to are known to be would tend to substantiate
the operators' view. In the other case, observation of actual meet-
ings of mine locals shows that the immigrant workers are responsible ;
the introduction of conciliation methods among a population com-
posed of peoples whose facial characteristics are so different from the
older inimigrants and nations may be expected to have unusual re-
sults. On the other hand, the tractability of the newer immigrant
when he is approached by those who understand him is a well-known
characteristic, and observation of actual instances has shown that
the inteUigent labor leader has been able to prevent many local
i"In consequence of the miners and operators again extending the terms
of the awards, this time for a period of four years, there were no serious inter-
ruptions to coal-mining operations by labor troubles in 1913" (Productioh of
Coal in 1913, p. 883).
Si6 TRADE UNIONISM AND LABOR PROBLEMS
strikes because he has known how to deal with the new immigrant
unionist.^
b. "Button strikes" are not caused by dissatisfaction with work-
ing conditions, but are a method of obtaining a closed shop at a
colliery. Buttons are issued each month by the union to members
as receipts for payment of their monthly dues. In order to enforce
the payment of membership dues by all workers at a colliery, a strike
of the button-wearers is sometimes inaugurated to force the non-
union workers to join. Naturally these " button strikes," as they are
called, occur most frequently during membership campaigns by the
United Mine Workers. In 19 13, when an effort to recruit the union
strength was being made, they were numerous and occasioned
vigorous protests from the operators. In 1915, during a campaign
for members preliminary to the 19 16 negotiations, they were again
quite numerous. While button strikes are technically violations of
the agreement, and the Board of Conciliation unanimously passed a
resolution condemning them as violations, the opinion has been ex-
pressed by labor leaders that if the operators had conceded the check-
off, the closed shop, and full recognition, the union would be in the
position of supplying labor according to contract instead of fighting
for its existence at every colliery.
Button strikes occur, as suggested above, spasmodically. In 1914
they practically disappeared for three reasons: -(i) in some cases
collieries were completely unionized and the custom of belonging to
the union apparently established; (2) in other cases a revulsion of
feeling took place among the workers and they were no longer willing
^The prevalence of petty-grievance strikes was a subject of comment in the
report of President John T. Dempsey, of the U.M. W. District No. i, to the
annual convention in July, 1913. He said : "I regret that it is necessary for me
to call your attention to the fact that during the past year violations of the
laws of the organization and the terms of the agreement have been quite fre-
quent. Numerous petty strikes for trivial causes have taken place and have
been the cause of much resentment and bitterness on the part of the operators.
I am of the belief that these practices cannot result in any permanent good for
our organization or its membership. Therefore I strongly recommend that this
convention place itself squarely on record for the faithful observance of our
laws and contracts."
The report of the convention's committees on officers strongly seconded this
advice, but the debate showed that some of the local union leaders believed
that they had grounds for this participation in mine strikes. The report was
adopted, but not unanimously.
SETTLEMENTS IN ANTHRACITE INDUSTRY 517
to lose two or three days' pay in order to force a recalcitrant worker
to join; (3) in still other cases the use of the lockout by operators
as a means of punishment was effective. One company, for example,
adopted the policy of closing down a colliery, where a button or
grievance strike had started, for two or three weeks. This method of
discipline, it is claimed, caused the workers to "think twice" before
striking again and to blame the instigators of the strike for their
loss of wages.
in. SETTLEMENTS OF DISPUTES AND GRIEVANCES
The nature of the questions coming up for settlement under the
1903 award and the subsequent agreements has largely determined
whether the settlements themselves are purely interpretative of the
award and the agreements or are amendatory of them.'^
I. The great majority of the settlements have been interpretative.
The specific questions involved which may be classed as necessitating
interpretative settlements have been as follows :
a. Questions of wages, such as advances allowed by award and
agreements, reduction in wages (that is, below the rates allowed),
back pay, and interpretation of sliding scale. Some of the other issues
indirectly required interpretation of the award and agreements, such
as those involving rates for yardage, cars, size of cars, and topping,
since the differentials and all rates of pay were permitted by the
award and the agreement to remain on the same system as prevailed
in April, 1902, the new provisions allowing only horizontal percent-
age increases. Fully half of the matters relating to wages were thus
clearly interpretative.
b. Check docking bosses and checkweighmen.
c. Hours.
d. Discrimination against employees because of union affiliations,
so far as it could be determined according to the definition of dis-
crimination given by the award and the agreements.
1 Since no records are kept of grievances or disputes unless they are brought
before the Board of Conciliation, the data relating to these matters are confined
to the records of the Board, four volumes of which have been published, cover-
ing the period 1903-1913. It is believed that the matters coming up for settle-
ment by the Board are fairly representative of the general character of all of
5i8 TRADE UNIONISM AND LABOR PROBLEMS
e. Strikes of employees.
Such matters as the price of powder and the rates or prices of coal
paid by employees for their domestic use involved a settlement of the
question of whether or not they could be considered as among those
conditions existing in April, 1902, which were to remain unchanged.
the grievances and disputes. The following table presents a recapitulation of
the matters coming before the Board for the ten years 1903-1913:
Grievances before Anthracite Conciliation Board, 1903-1913
Nature of Grievance
Settled
BY
Agree-
ment
With-
drawn *
Em-
PI.OYEES
Sus-
tain ED
Em-
ployer
Sus-
tained
Refused
BY
Board t
Umpire's Deci-
sion
TOTALSt
For Em-
ployee
For Em-
ployer
Wages
22
33
20
'5
2
2
4
10
19
123
2
Check docking boss
and checkweigh-
man
I
6
27
I
2
3
I
I
I
I
I
I
6
I
6
I
Discrimination
against employees
8
2
4
67
4
I
Price of powder
Strike of employees
Condition of em-
ployment ....
Collection of union
dues ....
I
I
6
7
5
12
2
2
5
2
5
9
6
I
Totals ....
32
87
52
32
6
16
27
252
* Cases marked "withdrawn" in the foregoing table were for various reasons, the large majority
being when the reply of the operators to the miners' complaints plainly showed that there was no
ground for complaint. Others were because of compromise by parties to grievance, failure of inter-
ested parties to appear before the Board to prosecute the cases, and complainants' quitting the employ
of the company. Except for 1903-1906, the records do not show the cause of withdrawal except in a
general recapitulation (Report of Board of Conciliation, 1903-1906, p. 335).
t Because complaints were out of the Board's jurisdiction.
+ Definite complaints to the number of 254 were made in the period 1903-1913, the division
according to periods being as follows :
Number
Period of Complaints
1903-1906 143
1906-1909 , 26
1909-1912 26
1912-1913 5g
SETTLEMENTS IN ANTHRACITE INDUSTRY 519
Generally speaking, the award and the subsequent agreements may
be said to have been fairly definite in their provisions. The largest
number of grievances brought before the Board in 1903-19 12 related
to wages and discrimination on account of union affiliation, 145 out
of the total of 195 being of these two classes. The award and the
agreements definitely fixed the differentials existing in 1902 as the
basis ; the questions coming up, therefore, related ( i ) to the differen-
tials and other conditions in existence before the award was made,
and (2) to the method and the extent of the application of the terms
of the award.
2. Matters coming up for settlement which could not be disposed
of by strict interpretation of the award or of the agreements. Only
four instances of this kind, apparently, have occurred, but they are
important because they occasioned or paved the way for amendments
to agreements. They may be stated briefly as follows:
a. The supplementing of the 1909 agreement by a resolution of the
Board of Conciliation which provided for a series of references of
grievances to be followed before they could be brought before the
Board itself. This was a legislative act on the part of the Board
which had not been specifically provided either in the awards or in
the agreement, but which was regarded as necessary to carry out
the spirit of the agreement.
b. Several grievances alleging discrimination by employers against
employees on account of union affiliation. These involved a single
point, and they were made the subject of special rulings which
became provisions of a later agreement.
c. A case involving the wages of laborers employed by con-
tract miners. This case was of special importance because a large
number of workers were concerned, and may be reviewed in more
detail.
The case first came up in May, 1903, in a grievance from certain
laborers employed by contract miners for a certain company,^ the
laborers requesting that the advance of 10 per cent in wages granted
by the Coal Strike Commission should be given to them as well as to
contract miners. The Board of Conciliation upheld the miners in
their contention, but in doing so it distinctly went beyond the pro-
visions of the award. The award of the Commission was "that an
1 Grievance No. 9 : Coxe Brothers & Co.
52 o TRADE UNIONISM AND LABOR PROBLEMS
increase of lo per cent over and above the rate paid in the month of
April, 1902, be paid to all contract miners for cutting coal, yardage,
and other work for which standard rates or allowances existed at that
mine, from and after November i, 1902," etc. No mention of the
employees of contract miners was made in connection with increase
in wages. The petition of the laborers to the Board of Conciliation
in this case asked that the Board "find that it was the intention of
the Anthracite Coal Strike Commission to include the class of mine
labor represented " by the petitioners. The action of the Board was
couched in terms that made it appear interpretative rather than
amendatory of the award. "Taking effect August i, 1903," said the
formal action of the Board, "it is resolved by the Board of Con-
ciliation, in its interpretation of the award of the Anthracite Coal
Strike Commission, that contract miners' laborers are entitled to
partake in the benefits of the wage provisions of the award." The
fact that contract miners' laborers were not regarded by the Com-
mission as employees of the operators was recognized in a decision of
Umpire Carroll D. Wright in a later case (Grievance No. 62, Sep-
tember 4, 1903), in which he said, "In regard to the miners' laborers,
the Commission left it entirely to the miners to do justice to them.
This was because the miners' laborers are not employees of the
operators, but of the miners themselves." Furthermore, the award
of the Commission was quite specific in providing that the 10 per
cent increase was to be paid "from and after November i, 1902."
The Board's ruling in regard to miners' laborers, however, was effec-
tive only from and after August i, 1903.
This view of the Board's action was taken by Umpire Charles P.
Neill in a decision on August 26, 1914 (Grievance No. 245, Item i),
interpreting a provision of the 19 12 agreement relating to the
"standard rate" to be paid by contract miners to their employees.'^
In reviewing former decisions and actions relating to contract
iThe decision in this case was of unusual importance because it involved the
contract system of one of the large mining companies (the Delaware and Hud-
son Coal Company). This company, instead of having a contract with each
individual contract miner covering the work of such individual worker, made
a contract with a single miner covering the mining of all the coal in a given
section of a mine and requiring the work of a number of miners as well as
laborers. The decision, which was based in part on former decisions and
rulings, directed the payment of standard rates to miners and laborers employed
by contract miners and involved the payment of large sums of money.
SETTLEMENTS IN ANTHRACITE INDUSTRY 521
miners' employees Dr. Neill said of the ruling made by the Board
in May, 1903 :
The Board of Conciliation had in its membership three official
representatives of the miners when acting in a collective capacity.
In acting on this grievance, therefore, the Board, with the concur-
rence of the body of contract miners as represented by their officials
on the Board, may be regarded as making an agreement supple-
mentary to the award of the Commission, and thus doing justice to
the laborers of the miners as it had been left to the miners to do
by the Commission, according to the opinion of Umpire Wright. On
no other hypothesis can the umpire understand the action of the
'Board in making its ruling effective August i, 1903.^
Since both Umpire Wright and Umpire Neill were connected with
the Coal Strike Commission in official capacities, their views may
be considered authoritative. Particularly significant is Dr. Neill's
point that the members of the equipartisan Board of Conciliation
had the power to bargain collectively.
d. Rates of pay. While the Board of Conciliation and the umpires
have been called upon on a number of occasions to decide what rates
should be paid in new operations, their decisions have always, so
far as it has been possible, applied the differentials existing in col-
lieries where similar work had been done in the past. In other words,
they have merely interpreted the award's provision that "present
methods of payment for coal mined shall be adhered to, unless
changed by mutual agreement" and the 1909 agreement's pro-
vision that " the rates which shall be paid for new work shall not be
less than the rates paid under the Strike Commission's award for old
work of a similar kind and nature."
There have been a few instances, however, where the award and
the agreements have not been found applicable and interpretations
have not been adequate. One of these cases was of ten years' stand-
ing and involved a condition not covered by existing differentials.
In the Klondike vein at the Ontario Colliery of the Scranton Coal
Company it was necessary to take down top rock to make the requi-
site height for mine cars. The rate paid for this work was $2.20
a yard. But this vein and another vein lying above it came together
and formed one vein of a considerably greater thickness, with a strip
1 Board of Conciliation, Decision of Umpire in re Grievance No. 24s, Item i.
522 TRADE UNIONISM AND LABOR PROBLEMS
of rock running through the middle of the vein. Where the two
veins merged there remained no necessity for taking down top rock
where the full height was mined, but it then became necessary to
handle the strip of rock between the two veins. The company put
on a new rate, and the miners presented a grievance. This grievance
was first presented in October, 1904.^ The company claimed that
it had the right, under the award, to readjust the rates of com-
pensation whenever there is a change in the conditions under which
the miner is working. The Board of Conciliation disagreed and the
case went to an umpire. The umpire held that the case was one to
which the award of the Commission was not applicable and the
grievance was not sustained. But the umpire's decision also stated
that "the question of what rate should be paid for the handling of
the rock imbedded in the coal vein was a proper subject jor a new
agreement."^ The matter did not come up again until 1912, when
a grievance was presented by certain employees in the Ontario Col-
liery that since 1904 there has been no fixed and agreed-upon rate
for cutting the rock under question. Again the case went to an
umpire' — it happened that it was the same umpire, Dr. Neill —
and the decision was the same so far as the award and the agreement
were concerned. But instead of merely suggesting that the question
was a subject for a new agreement, the second decision specifically
provided " that as the first step towards a settlement of this grievance,
the proper representatives of the Company shall meet with the miners
working in the chambers to which this grievance applies, or with a
committee selected by these miners, and endeavor in good faith to
agree upon some fixed and definite rate or rates to be paid for
handling this rock. This first step is directed in conformity with
the fourth award of the Anthracite Coal Strike Commission, which
clearly implies that adjustments of grievances shall first be under-
taken 'by consultation between the superintendent or manager of the
mine or mines and the miner or miners directly interested.' If no
agreement can be reached as a result of this first step, then in con-
formity with subsection (d) of the agreement of May, 1912, the
representative of the Company shall meet with the Grievance Com-
mittee and the member of the Board of Conciliation and endeavor to
1 Report of Board of Conciliation, Grievance No. 128.
^Ibid. Grievance No. 214, Item 3.
SETTLEMENTS IN ANTHRACITE INDUSTRY 523
agree upon a rate or rates. In the event of a failure to agree, the
fixing of the rate shall be referred to the Conciliation Board; and
when a rate shall be finally agreed upon, it shall be retroactive to a
date ten days after the date on which this decision is presented to
the meeting of the Conciliation Board. It is to be understood that
this decision applies only to the handling of what can be properly
called 'rock,' and that the rates are to be fixed for this only."^
A second case involved the payment of a large sum of money by
the anthracite operators. It was of unusual importance because it
involved the application of the sliding scale for March, 1912, the
last month of the existence of that method of payment, and hence
did not constitute a specific precedent. Apparently such a case in-
volved merely an interpretation of the 1903 award; in reality it
went beyond the award, because it had been found, in applying the
sliding scale, that the strict letter of the award could not be carried
out. The award provided that each employer should apply the in-
crease in pay on the earnings of the particular month on the sales
of which the sliding scale was calculated ; the practice, however, was
adopted of paying the sliding-scale increase by applying the per-
centage based on the sales of a given month on the earnings of the
succeeding month until April i, 1912, when a suspension occurred.
After work was resumed the mine workers claimed that the increase,
according to the sliding scale, for the month of March was still due
them. Various questions arose as to the method by which this in-
crease ought to be paid. The umpire, however, decided that the
workers were entitled to receive the sliding-scale increase as calculated
upon the basis of March coal prices.^ It will be noted, therefore,
that this case was one which had to be decided as a case in equity.
The Board of Conciliation failed to arrive at any agreement, and
the umpire was called upon to act as arbitrator.
Within the last year or so the introduction of a coal-cutting
. machine has caused the bringing up of a question of rates of pay
which apparently has no precedent or basis in preceding rulings and
decisions. The question, in the form of a request for rates of pay
higher than those set by operators who have installed the machine,
1 Report of Board of Conciliation, Grievance No. 214, Item 3.
^Board of Conciliation, Decision of Umpire in re Sliding Scale for March,
1912 (rendered May i, 1913).
524 TRADE UNIONISM AND LABOR PROBLEMS
has gone to the Board. The Board, in December, 1914, failed to
agree on a decision and the matter went to Umpire George Gray.
In this case the concihation and arbitration machinery provided by
the agreement has thus been called upon to act on a fundamental
question which is not covered by the award or the subsequent agree-
ments. It is significant that the 1915 demands of the tri-district
convention of the United Mine Workers include one for "a readjust-
ment of the machine-mining scale."
The 1915 demands, as has already been suggested-, reflect the
situation which has been created by the occurrence of such matters
as these. Two distinct clauses in these demands indicate a desire
on the part of the mine workers to change the conciliation machinery
to meet the situation. Tbey are as follows :
9. We demand a readjustment of the machine-mining scale to the
extent that equitable rates and conditions shall obtain as a basis for
this system.
10. We demand that arrangements of detailed wage scales and the
settlement of internal questions, both as regards prices and condi-
tions, be referred to the representatives of the operators and miners
of each district to be adjusted on an equitable basis.
The trend is thus toward clothing the system of conciliation and
arbitration with more definite and greater authority to settle funda-
mental questions of wages and conditions of labor. For over twelve
years these questions have been regarded as settled by the 1903
award, except where situations have arisen which forced interpreta-
tions that were essentially supplementary agreements. It is now
proposed to get farther away from the 1903 award as the constitution
of industrial relations, to make the agreement the real constitution;
and to transform, the conciliation machinery into a more responsible
and more responsive legislative body.
Edgab Sydenstricker
Washington, D. C.
XXXIV
EQUALIZING COMPETITIVE CONDITIONS^
W[THOUT going too much into details of the organizations
known as the Illinois Coal Operators' Association, on the one
hand, and District Number 12 of the United Mine Workers of Amer-
ica, on the other, it must be understood that the basis of the agree-
ment between them is that of a protected competitive existence for
all. The rates of mining are so fixed that the coal operators can do
business. That is the first and basic proposition. Naturally the rank
and file of the miners expected a scale which would enable them to
earn a practically uniform wage throughout the state. The leaders,
however, contended that the first object of the scale was to permit
every mine to run and get into the market, and that all other ques-
tions must be subservient to this. The first clause of the joint
declaration of principles says : " This joint movement is founded
and is to rest upon correct business ideas, competitive equality, and
well-recognized principles of justice." This involves a consideration
of railroad rates to market points, conditions of the coal mined, etc.
The effect of the strike of 1897, which was successful not only in
Illinois but throughout the competitive bituminous field, was to
bring into prime importance the interstate conferences and agree-
ments. In the interstate convention the operators of Illinois, Indiana,
Ohio, and western Pennsylvania are represented, and the rates of
mining and the conditions are fixed in that convention for all points
on a competitive basis ; that is, so that each operator shall have a
chance to mine coal and get it to his market. For Illinois the con-
vention fixes only the price at Danville, Illinois, which is thereby
made the basing point for the state. The Illinois Coal Operators'
Association and the representatives of the mine workers of Illinois
then meet in joint convention and adjust the rates throughout the
state in accordance with the Danville rate.
'^From Eleventh Special Report, U. S. Commissioner of Labor, 1904, pp. 390-
394.
525
526 TRADE UNIONISM AND LABOR PROBLEMS
At the interstate convention which followed the strike of 1897 the
Illinois miners demanded a mine-run basis for Illinois and threatened
to renew the strike if this was not conceded. That convention then
fixed the mining price at 37 cents a ton for hand mining, run-of-mine
coal, with a differential of 10 cents a ton run-of-mine for machine
mining. That is, the companies were to pay 27 cents a ton for
machine-mined coal in the Danville district and 37 cents a ton
for hand-mined coal, the other rates in Illinois to be fixed compet-
itively upon this basis. The Illinois joint conference of employers
and miners met in Chicago in 1897 and adjusted the rates throughout
the state.
The Illinois Coal Report for 1897 shows the effects of the equaliz-
ing principle on different sections of the state. In the northern, or
thin- vein fields, the prices per gross ton were advanced 14 to 20 per
cent, while in the southern, or thick- vein fields, the advance was 20
to 55 per cent. The prices in the northern fields had been near 50
cents per ton and in the southern fields 20 to 25 cents per ton. At
these rates the miners in the southern fields had earned as high wages
as those in the northern fields, but the advances following the strike
placed the two sections nearer an equality in the cost of mining,
but enabled miners in the southern fields, without restrictions
on their output, to earn much higher wages than miners in the
northern fields.
Perhaps the best statement of the principle underlying the Illinois
agreement was made by Mr. Moorshead, a southern Illinois operator,
who has had to surrender as much of the natural advantages of his
position as anyone, in his reply to the miners of the Pekin mine who
wanted increased compensation for the increased amount of dead
work in that district. This was in the joint convention of 1902, held
in Peoria, and his words throw a flood of light upon this subject of
the basis of agreement:
... Go into the northern field and the miners must suffer very
much there as compared with the miner in the thick seam. When
you get into the thick part of the No. 6 seam the operator suffers.
You penalize him in his good conditions that he may not drive the
more unfortunate operator with his thin seam out of the market. . . .
We have banded together here so that the operators in every dis-
trict might exist, notwithstanding the different conditions that pre-
vail; and so long as we work on these lines some miners will have
EQUALIZING COMPETITIVE CONDITIONS 52?
to accept less wages than others. So long as we work on competitive
lines some operators will have to receive less compensation than they
are really entitled to. . . .
Mr. John Mitchell, replying for the miners, said:
I quite agree with Mr. Moorshead that in determining the rate
J you have to take into consideration the competitive conditions. I
i think he will agree with me, however, that there are considerations
'that enter even into that. Where conditions are abnormal in a
vein, that has always been a consideration in determining the scale
of wages.
In the convention of 1900, held in Springfield, a miner proposed
that an extra rate be put on for mining in wet mines. "When men
must work," he said, "in water up to their knees all day long and
every day in the month, it is expected that they will be compensated
for it ; where men have perfectly dry work we are satisfied with the
scale." It was agreed that no operator ought to permit his mines to
run in that condition and that miners ought to have more wages
under such conditions, and that to put an extra mining rate on wet
mines might force the merely careless operator to improve his mines,
but "it is a question whether you would not bring those parties into
such a condition that they could not compete with their neighbors.
They are in the same markets," and so the matter was dropped.
The machine question, also, divides and weakens the operators in
their resistance to the union. There are 915 mines in the state, but
only 332 of these are "commercial" or "shipping" mines, producing
96 per cent of all the coal and employing 93 per cent of the mine
workers. Of these shipping mines only 64 used coal-cutting machines
exclusively or in part in 1902. These mines are concentrated in the
hands of some 30 companies. Against these 30 C9mpanies are 300
companies not using machinery, because the nature of their coal
seams does not make it practicable. The question is mainly one of
the thickness of the seams and the nature of the roof. Coal measures
in Illinois range from one foot to nine feet in thickness. The thin
veins are in the northern sections and the thick veins, for the most
part, in the central and southern sections.
The distribution of machines reveals the significance of the state-
ment made by the general manager of a company operating exten-
sively in the southern fields:
528 TRADE UNIONISM AND LABOR PROBLEMS
The operators were whipped to a standstill. Impoverished by our
insane price-cutting and the long period of hard times, threatened
with a total loss of all our markets on the very eve of returning good
times, we simply had to take our medicine. We were compelled not
only to submit to any terms the miners' union saw fit to impose, but
to join the Illinois Coal Operators' Association, where we are out-
voted and made to seem to be unanimously opposed to ourselves. . . .
Oh, yes, it is a voluntary association, of course, and votes as a unit
in conferences, of course. . . . Well, I will say only this : We were
whipped into this voluntary happiness by the strike of 1897, and
we don't dare to get out of it.
And the same natural advantages of the southern fields for the use
of the machines add force to the vigorous opinion of a miner whose
felations with the union he desired not to have mentioned. How
far his opinion is shared by other miners in the state there is no
means of knowing. He said :
Of course you can get more coal from an undercut in an eight-
foot seam than you can in a five- or six-foot seam. The thick-vein
fellows were whipped into the competition agreement by a strike.
Some of them thought to best the game on the sly by virtue of
natural advantages, and are mad because they have met with ob-
structions and are forced to give the other properties a chance.
Did you ever think that God Almighty restricts the output of sun-
shine 50 per cent to give the moon a chance? If you will promise
to report exactly what I say I will say that we are willing to submit
our case to the people of the United States and to admit that some
of the thick-vein companies do not get all the coal it would be
possible to take out of their mines at all times. The state officials,
and the local unions, as such, have nothing to do with this. The
coal just don't come up. But the question is this: Shall 20 or 30
mines, owned by four or five companies, employing 6000 men, be
permitted, because of natural advantages they did not create — shall
they be permitted to close down 890 other mines, owned by 275 other
firms, and employing 39,000 other men? I for one am willing to
go before the people of Illinois with this proposition : If we must
restrict the output of a score of eight-foot mines in order to increase
by millions of tons the output of Illinois coal mines as a whole, are
we not justified from every point of view except that of the three
or four companies owning eight-foot mines in doing so ?
This much is stated in order that the machine question in the
Illinois coal fields may be readily understood. It must be added that
the "pick" operators— that is, operators of mines without machines
EQUALIZING COMPETITIVE CONDITIONS 529
— stoutly contend that they do not sympathize with any policy of
handicapping the machines, but it will also appear that the mine
workers in their joint conferences take advantage of the division of
the operators on this point. The whole question, it will readily be
seen, is a detail of the large policy of equalizing competitive conditions.
In Illinois the machine differential was made 7 cents for the entire
state as a result of the strike of 1897. In 1898 the national president
of the interstate convention granted the Danville district a lo-cent
differential. The Illinois officials claim that 7 cents is the average
differential found to prevail under nonunion conditions- in Illinois,
taking the coal seams in which the machine had been able to hold
its own under nonunion or open conditions. They claim that not
only is this the average difference in cost the operators were able
to establish but also that it is sufficient to justify the introduction of
machines where machines are practicable, and that, furthermore,
it is all the machines are worth to the mines.
A general statement of differentials for the competitive field is
here subjoined, based upon the prices paid in each locality in 1902-
1903. Changes in rates since agreed upon have been made upon
practically the same ratio throughout the field.
Mining Rates showing Machine Differentials according to the
Interstate Agreement for the Year beginning April i, igo2
(Ton = 2000 pounds)
Hand (Pick)
Chain-Machine
Pick- (or
Punch-)
Mining
Mining
Machine
Mining
Rate
Rale
Rati
Lump
Mine Run
Lump
Mine Run
Lump
Mine Run
Pennsylvania . .
I0.8000I
$0.5171
$0.5300
$0.3426
$0.5768
$0.3716
(Pittsburgh
district) . . .
.66802
.4318
.4420
.2856
.4780
.3089
Ohio (Hocking
Valley) . . .
.8000
•5714
.5300
.3786
•575°
.4107
Indiana ....
.8000
.4900
.5850
.3650
.6200
.3900
Illinois ....
(Danville dis-
trict) ....
.4900
.3900
.3900
1 Thin vein.
' Thick vein.
S30 TRADE UNIONISM AND LABOR PROBLEMS
In opening the "interstate convention and sixth annual joint con-
ference of coal miners and operators of Illinois, Indiana, Ohio, and
Pennsylvania" for 1903, Mr. John Mitchell, as president of the
United Mine Workers of America, said:
Last year the attention of the operators was called to the inequal-
ities that exist in our interstate agreement. I can do no more than
repeat in substance what I said on this subject last year. We believe
the time is here when there should be an adjustment of our machine-
mining scale. Our movement cannot live with any degree of satis-
faction if we are going to have three or four different prices for
mining coal by machinery. The introduction of mining machinery
and the prices paid for mining coal by machinery must be so adjusted
that labor will enjoy a share of the benefits and profits that come
from the introduction of improved methods. . . . We believe also
that there should be a fixed and flat differential for machine coal.
We believe that the experience of the operators and miners in Illinois
is such as to justify us in asking that that differential be fixed at
7 cents a ton.
The constant endeavor of the union has been to bring all the
states to an equivalent of the 7-cent differential.
As heretofore shown, the mining machines are used almost exclu-
sively in the southern districts of the state, where the veins are thick
and adapted to the use of machines. Operators in these districts
complain not only of the differential but also of definite restrictions
on the output of the machines. These complaints take the form of
charging the union with limiting the number of loaders after the
machine and with preventing the machine-runner from cutting more
coal than the loaders can handle by setting a limit on the number of
runs and by equalizing the turns. These grievances are stated at
length in an interview by the general manager of a company operat-
ing several mines in the southern fields of Illinois and in other states
in which punching machines are used. He says:
To go into details, and taking the Mount Olive shaft, where a
Harrison (pick) machine is used, the crew consists of one runner,
one helper, seven loaders — number fixed by unions. They work
ostensibly eight hours, but seldom or never actually that number.
The rate is 42 cents per ton, or 7 cents less than hand-mine rates.
This 42 cents is divided as follows: machine-runner, 5.5 cents;
helper, 5 cents ; loaders, 31.5 cents. This division of the mining rates,
42 cents, between the machine men and the loaders is attended to by
EQUALIZING COMPETITIVE CONDITIONS 53*
them, the company having no voice in the matter in such division,
with the result that the machine-runners get the worst of it, and the
loaders, being in the majority, outvote them in the unions, thus
placing what amounts to a handicap upon securing men to run the
machine. The loaders load nine tons per day at this shaft, and this
limits the machine — since the runner has no incentive to cut more
than will be loaded — to sixty- three tons per day (nine men to the
crew, output sixty-three tons, gives an average of seven tons per day
per man). These restrictions prevent the employment of speedy
workmen, or at least of workmen for their speed, and hold down the
speed of speedy men to afford employment for as many men as pos-
sible. These restrictions are enforced by fines, or more commonly
by the union laying the men off as a punishment. The fine usually
amounts to the excess earnings. . . .
Mr. Reynolds, afterwards the state president of the Illinois Mine
Workers' Union, as spokesman for the miners, replied to the charges
of restriction as follows :
Mr. Chairman and gentlemen, in answer to the charges preferred
against the Illinois miners by the Illinois operators, I wish to say
that in the first place they are charged with restricting the output of
the mines of Illinois, first, by neglecting their work; second, by
adopting a system of so many cars a day ; third, by adopting the rule
of so many miners after a machine in the machine mines of Illinois.
Now, friends, referring to the first charge. . . . When that com-
plaint was made against the Illinois miners two years ago, in order to
protect the operators, we inserted a clause in our state agreement
which gives the operators the right to discharge any member of our
organization who lays out two days in succession, unless his absence
from the mine is caused from sickness or he gets permission from the
mine manager. I believe the operators have taken advantage of
that clause.
Second, I wish to say in regard to restricting the number of cars
each man should load in the mine, that possibly in a few mines in
the state of Illinois that may be a practice, but I propose to explain
to you the reason why. Under our state agreement the burden of
giving to each and every miner an equal turn of the mine rests upon
the shoulders of the operators. In some mines they have appealed
to them time and again in order to secure what they were entitled
to under the agreement, and as a last resort in those mines they were
forced to place a restriction in order to get an equal turn of the
mine. Before that they were always careful to figure the output of
the mine and then divide it between the number of men working in
that mine, thereby guaranteeing that while every man got an equal
turn, the output of that mine was not reduced one ton. That is
532 TRADE UNIONISM AND LABOR PROBLEMS
why restrictions have been placed in a few mines. Wherever restric-
tions were placed for any other purpose our organization has always
taken a stand against it and compelled the men to wipe it off their
books if passed by their locals.
In regard to the number of men after a machine, I will say that
rule was established when there was no union in the state of Illinois.
That system is as old as machine mining is in the state of Illinois,
and the operators have not protested against it in any other district
or state conventions. I cannot understand why they should come
here and enter a protest against something that has been going on
in the state of Illinois for over twenty years to my knowledge.
In the foregoing sections, treating of the machine question, it
appears that the equalization of turns is one of the means by which
the output of machines is restricted, though not designed for that
purpose. Since, however, equalization of turns prevails in pick mines
as well as machine mines, the treatment of the subject and its bear-
ing on output will be taken up apart from the treatment of machines.
The Illinois agreement contains the following sections :
Twenty-eighth. The operator shall see that an equal turn is
offered each miner, and that he be given a fair chance to obtain the
same. The checkweighman shall keep a turn bulletin for the turn-
keeper's guidance. The drivers shall be subject to whomever the
mine manager shall designate as turn-keeper in pursuance hereof.
In mines where there is both hand and machine mining an equal
turn shall mean approximately the same turn to each man in the
machine part of the mine, and approximately the same turn to each
man doing hand work ; but not necessarily the same to each hand
miner as to each man working with the machine.
The subdistrict agreements are as a rule silent upon the subject,
as most of the Illinois mines have free turns, or an unlimited-turn
system. That is to say, where each man can get all the cars he wants
to load he has no objection to other men's wanting and getting more.
The third-vein subagreement in Illinois says :
Except in the case of a closed room or room driven for air, or when
an unlimited turn prevails, no miner shall have a " free turn," either
day or night, or more than his share of cars.
The equality of opportunity in the mines, or of "turn," which
means number of cars brought to the face of a miner's working-place
in a given time, is one of the sticking points with a miner. His
EQUALIZING COMPETITIVE CONDITIONS 533
education upon this point dates from years ago when, under a system
of " truck stores " or " company houses," it is claimed the miner who
did not live in a company house or deal at the company store, or some
store where the company got a commission on sales, did not get
enough cars to fill during the day to pay him for going into the mine.
There have been times in Illinois, and elsewhere, when a miner would
stay all day in a mine and never get a pit car to load. Discrimination
against individuals in the matter of "turns" was used to drive men
who had been active in strikes, or organizations, out of the mines. It
was more subtle, more effective, and less likely to become public
than a blacklist. Moreover, the pit boss could use it to get even
with men personally distasteful to him. One acquainted with the
abuses of "turns" practiced upon miners in former years cannot
wonder that those abuses have had the effect of making the miners
very uncompromising on this point. Overcrowding of mines and the
advent of the "tonnage-getter," added to the old objections to free
turns, make it difficult for the average miner to see that he is not
surrendering his opportunity to live to the mere whim or like or dis-
like of a mine manager or a pit boss when he surrenders his right
to equal turns of pit cars in a mine.
Ethelbeet Stewart
United States Defaktment of Labor,
Bureau of Labor Statistics
XXXV
THE HART SCHAFFNER & MARX LABOR
AGREEMENT^
THE parties whose names are signed hereto purpose entering into
an agreement for collective bargaining with the intention of
agreeing on wage and working conditions and to provide a method
for adjusting any differences that may arise during the term of
this contract.
In order that those who have to interpret this instrument may
have some guide as to the intentions and expectations of the parties
when entering into this compact, they herewith make record of their
spirit and purpose, their hope and expectations, so far as they are
now able to forecast or state them.
On the part of the employer it is the intention and expectation
that this compact of peace will result in the establishment and main-
tenance of a high order of discipline and efficiency by the willing
cooperation of union and workers rather than by the old method of
surveillance and coercion; that by the exercise of this discipline all
stoppages and interruptions of work and all willful violations of
rules will cease ; that good standards of workmanship and conduct
will be maintained and a proper quantity, quality, and cost of pro-
duction will be assured ; and that out of its operation will issue such
cooperation and good will between employers, foremen, union, and
workers as will prevent misunderstanding and friction and make for
good team work, good business, mutual advantage, and mutual respect.
On the part of the union it is the intention and expectation that
this compact will, with the cooperation of the employer, operate in
such a way as to maintain, strengthen, and solidify its organization,
so that it may be made strong enough, and efficient enough, to
1 Published by the company, 1916. J. E. Williams, Chairman of the Board
of Arbitration. See Earl Dean Howard, " The Development of Government in
Industry," Illinois Law Review, Vol. X (1916), pp. S67-S73.
S34
HART SCHAFFNER & MARX AGREEMENT S3 5
cooperate as contemplated in the preceding paragraph ; and also
that it may be strong enough to command the respect of the employer
without being forced to resort to militant or unfriendly measures.
On the part of the workers it is the intention and expectation
that they pass from the status of wage servants, with no claim on
the employer save his economic need, to that of self-respecting
parties to an agreement which they have had an equal part with him
in making ; that this status gives them an assurance of fair and just
treatment and protects them against injustice or oppression of those
who may have been placed in authority over them ; that they will
have recourse to a court, in the creation of which their votes were
equally potent with that of the employer, in which all their griev-
ances may be heard and all their claims adjudicated ; that all
changes during the life of the pact shall be subject to the approval
of an impartial tribunal, and that wages and working conditions shall
not fall below the level provided for in the agreement.
The parties to this pact realize that the interests sought to be
reconciled herein will tend to pull apart, but they enter it in the faith
that by the exercise of the cooperative and constructive spirit it will
be possible to bring and keep them together. This will involve as
an indispensable prerequisite the total suppression of the militant
spirit by both parties and the development of reason instead of force
as the rule of action. It will require also mutual consideration and
concession, a willingness on the part of each party to regard and
serve the interests of the other, so far as it can be done without too
great a sacrifice of principle or interest. With this attitude assured
it is believed no differences can arise which the joint tribunal cannot
mediate and resolve in the interest of cooperation and harmony.
SECTION I. ADMINISTRATION
This agreement is entered into between Hart Schaffner & Marx,
a corporation, and the Amalgamated Clothing Workers of America,
and is effective from May i, 1916, to April 30, 1919.
Officers of the Agreement
The administration of this agreement is vested in a Board of
Arbitration and a Trade Board, together with such deputies, officials,
536 TRADE UNIONISM AND LABOR PROBLEMS
and representatives of the parties hereto as are now or hereafter
may be appointed for that purpose, whose duties and powers are
hereinafter described.
Board of Arbitration
The Board of Arbitration shall have full and final jurisdiction
over all matters jirising under this agreement, and its decisions
thereupon shall be conclusive.
It shall consist of three members, one of whom shall be chosen
by the union, one by the company, and the third shall be the mutual
choice of both parties hereto and shall be the chairman of the Board.
It is agreed that the Board as constituted under the old agreement
shall be continued during the present agreement, William O. Thomp-
son being the choice of the union, Carl Meyer the choice of the
company, and J. E. Williams, chairman, being chosen by agreement
of both parties.
It shall be the duty of the Board to investigate, and to mediate
or adjudicate, all matters that are brought before it and to do all in
its power to insure the successful working of the agreement. In
reaching its decisions the Board is expected to have regard to the
general principles of the agreement ; the spirit and intent, expressed
or implied, of the parties thereto; and, especially, the necessity of
making the instrument workable, and adaptable to varying needs and
conditions, while conserving as fully as possible the essential interests
of the parties involved.
The line of practice already developed by the Board shall be
continued. This contemplates that questions of fact and testimony
shall in the main be considered by the Trade Board, while the Board
of Arbitration will concern itself mainly with questions of principle
and the application of the agreement to new issues as they arise.
But this is not to be construed as limiting the power of the Board,
which is broad enough to make it the judge of facts as well as
principle when necessary and to deal with any question that may
arise whose disposition is essential to the successful working of the
agreement.
By agreement between the chief deputies cases may be heard and
decided by the chairman of the Board alone.
HART SCHAFFNER & MARX AGREEMENT 537
Emergency Powers
If there shall be a general change in wages or hours in the clothing
industry which shall be sufficiently permanent to warrant the belief
that the change is not temporary, then the Board shall have power
to determine whether such change is of so extraordinary a nature as
to justify a consideration of the question of making a change in the
present agreement, and, if so, then the Board shall have power to
make such changes in wages or hours as in its judgment shall be
proper.
Trade Board
The Trade Board is the primary board for adjusting grievances,
and shall have original jurisdiction over all matters arising under
this agreement and the decisions relating thereto, and shall consider
and dispose of all such matters when regularly brought before it,
subject to such rules of practice and procedure as are now or may be
hereafter established.
The Board shall consist of eleven members, all of whom, except-
ing the chairman, shall be employees of Hart Shaffner & Marx.
Five members shall be chosen by the company and five by the union,
and it is understood that these shall be selected in such manner as
to be representative of the various departments — cutting and trim-
ming, coat, vest, and trousers.
The Board shall be presided over by a chairman who shall rep-
resent the mutual interests of both parties hereto, and especially the
interest of the successful working of this agreement. He shall pre-
side at meetings of the Board, assist in investigation of complaints,
endeavor to mediate conflicting interests, and in case of disagree-
ment shall cast the deciding vote on questions before the Board.
He shall also act as umpire on the cutting-room commission, and
perform such other duties as may be required of him by the agree-
ment or by the Board of Arbitration.
The chairman shall hold office during the term of the agreement,
and in case of death, resignation, or inability to act, the vacancy
shall be filled by the Board of Arbitration.
It is especially agreed that James Mullenbach, chairman under
the former agreement, shall be retained under the present agreement.
538 TRADE UNIONISM AND LABOR PROBLEMS
Meetings of the Board shall be held whenever necessary at such
times as the chairman shall direct. Whenever an authorized repre-
sentative of both parties is present, it shall be considered a quorum.
Each party is privileged to substitute an alternate in place of the
regular member whenever they so desire. Should either side, after
reasonable notice, fail to send a representative to sit on the Trade
Board, then the chairman may proceed the same as if both parties
were present.
Members of the Board shall be certified in writing to the chair-
man by the Joint Board of Hart Schaffner & Marx, and the proper
official of the company ; and any member, other than the chairman,
may be removed and replaced by the power appointing him.
Deputies
The deputies are the officers having direct charge of the execu-
tion of the provisions of this agreement in the interest of their re-
spective principals. Each of the parties hereto shall have a sufficient
number of deputies to properly take care of the work necessary to be
done to keep the docket from being clogged with complaints and
to insure an efficient working of the agreement. They shall have
power to investigate, mediate, and adjust complaints, and settlements
made by the deputies of the parties in dispute shall be legally bind-
ing on their principals. In case of appeal to the Trade Board or Board
of Arbitration the deputies maj'^ represent their respective principals
before these Boards, and shall have power to summon and examine
witnesses, to present testimony or evidence, and do such other things
as may be necessary to place their case properly before the trial body,
and such body shall see to it that they be given adequate opportunity
and facility for such presentation, subject to the usual rules of
procedure.
One of the deputies on each side shall be known as the chief
deputy, and the statement of the chief deputy shall be regarded as
an authoritative presentation of the position of his principal in any
matter in controversy. Unless reversed or modified by either of the
trial boards the agreement of the chief deputies in all matters over
which they or their principals have authority shall be observed by
all parties.
HART SCHAFFNER & MARX AGREEMENT 539
The union deputy shall have access to any shop or factory for the
purpose of making investigations of complaints ; but he shall in all
cases be accompanied by the representative of the employer. Pro-
vided, that the latter may at his option waive his right to accompany
him ; also that in minor matters, where convenience or expedition may
be served, the union deputy may call out the shop chairman to obtain
information without such waiver.
The deputies shall be available to give their duties prompt and
adequate attention, and shall be subject to the direction of the Trade
Board in all matters relating to the administration of this agreement.
Qualifications of Deputies
Each deputy, in order to qua,lify for duty, must have a commis-
sion signed by the proper official representing the union or the
company, and said commission must be countersigned by the chair-
man of the Trade Board. Deputies must be either employees of Hart
Schaffner & Marx or persons who are connected with the Joint Board
of Hart Schaffner & Marx.
Shop Repeesentative
The union shall have in each shop a duly accredited representa-
tive authorized by the Joint Board who shall be recognized as the
officer of the union having charge of complaints and organization
matters within the shop. He shall be empowered to receive com-
plaints and be given sufficient opportunity and range of action to
enable him to make proper inquiry concerning them. When nec-
essary for the shop representative to leave his place to investigate
complaints, the foreman may, if he deems it necessary, ask to be
informed of the purpose of his movements, and the representative
shall comply with his request.
It is understood that the shop representative shall be entitled to
collect dues and perform such other duties as may be imposed on him
by the union, provided they be performed in such manner as not to
interfere with shop discipline and efficiency.
It is expected that he shall represent the cooperative spirit of
the agreement in the shop and shall be the leader in promoting that
amity and spirit of good will which it is the purpose of this instrument
to establish.
540 TRADE UNIONISM AND LABOR PROBLEMS
The cooperative spirit enjoined on the shop representative in the
foregoing paragraph shall be expected in equal degree from the shop
superintendent, who shall be expected to contribute his best efforts
to promote harmony and good will in the shops.
SECTION II. PROCEDURE
When Grievances arise
When a grievance arises on the floor, of the shop, the complainant
shall report it with reasonable promptness to the shop representative,
who shall present it without undue delay to the shop superintendent.
These two may discuss the complaint in a judicial temper, and may
endeavor to agree to an adjustment. It is understood, however, that
they are not a trial board, and it is not expected that they shall argue
or dispute over the case. In the event that the shop representative
is not satisfied with the action of the superintendent, he may
promptly report the matter to his deputy, with such information as
will enable him to deal advisedly with the case.
Failure to comply with these provisions for the regulation of shop
transactions shall subject the offender to discipline by the Trade
Board.
Informal oral adjustments made by shop officials are subject to
revision by the Trade Board, and are not binding on their principals
unless ratified by the chief deputies.
Adjustment by Deputies
When the shop officers report a disputed complaint to their respec-
tive deputies, they shall give it such investigation as its nature or
importance demands, either by visitation to the shop or by the
taking of testimony, and shall make an earnest endeavor to reach a
settlement that will be just and satisfactory to all the parties
in dispute.
Disagreement by Deputies
In the event of a failure to agree on an adjustment, the deputies
shall certify the case for trial to the Trade Board, agreeing on a
written statement of facts if possible. In certifying such disagreement
HART SCHAFFNER & MARX AGREEMENT 541
the deputy appealing to the Board shall file a statement stating
specifically the nature of the complaint alleged with the Trade Board,
and shall furnish a copy to the representative of the dissenting party,
who shall have at least twenty-four hours to prepare his answer unless
otherwise agreed on ; provided, that by direction of the chairman of
the Trade Board emergency cases may be brought to trial at once.
Where no statement has been filed in writing within a reasonable
time after disagreement of the deputies it may be assumed that the
disagreement no longer exists, and the case may be considered
settled.
Docket and Records
The chairman of the Trade Board shall keep a docket in which
all cases shall be entered in the order of their arising. Unless other-
wise directed by the chairman, cases shall be heard in the order of
their filing. Duplicate records shall be made by the Board, one copy
of which shall be retained by the chairman and one given to the
chief deputy for the union. Such records shall contain all complaints
filed with the Board, orders or decisions of the Board or of the
deputies or of any committee, calendars of pending cases, and such
other matter as the Trade Board may order placed upon the records.
Direct Complaints
Complaints may be made directly by either party, without the
intervention of a shop representative, whenever it desires to avail
itself of the protection of the agreement ; but a statement of the
facts and grounds of such complaints must be filed in writing as
hereinbefore provided. Unless written notice has been filed, it may
be presumed, officially, that no complaint exists.
Decisions, Appeals, etc.
All decisions of the Trade Board shall be in writing, and copies
given to the representatives of each party. Should either party
desire to appeal from the decision, it shall file with the Board a
notice of its intention so to do within ten days of the date of the
decision. Or if either party desires an amendment or modification of
the decision, or a stay of execution pending the appeal, it may make
S42 TRADE UNIONISM AND LABOR PROBLEMS
a motion in writing to that effect, and the chairman shall use his
discretion in granting it. In certifying the case to the Board of
Arbitration the chairman shall make a summary of the case in
writing, giving the main facts and the grounds for his decision.
Number of Higher Trial Board
On being notified of the appeal to the Board of Arbitration, said
appeal may be heard by the chairman, as representative of the
Board, if both parties agree to it and it is acceptable to him. He
shall, however, have the right to call for the full Board if in his
judgment the situation requires it. In the event that the representa-
tive of the Board of either party is unable to attend a Board meeting,
such party may at its discretion furnish a substitute.
Hearing, how Conducted
The chairman shall determine the time and place of meeting and
shall notify all the parties in interest. Each party shall prepare the
case in advance, and have its testimony, evidence, and facts in readi-
ness for the hearing. The Board shall give each party ample op-
portunity to present its case, but shall be the judge of procedure and
shall direct the hearing as to its order and course. After giving an
adequate hearing of the evidence and arguments the Board shall
render its decision in writing, and shall furnish copies to the chief
deputies of each party and to the chairman of the Trade Board. In
the event that the Board is unable to reach a unanimous decision,
the decision of a majority shall be binding.
Motions for Rehearing
The Board may after a reasonable time grant a rehearing of any
decision, if, in its judgment, there appear sufficient reasons for doing
so. Decisions are to be regarded as the Board's best solution of the
problem offered to it at the time of hearing, but as the problem
changes with time and experience it is proper that there should be
afforded a reasonable opportunity for rehearing and review. Motions
for a rehearing shall be made in writing, and shall set forth the reason
for the request.
HART SCHAFFNER & MARX AGREEMENT 543
Enforcement of Decisions
All decisions, whether of deputies, Trade Board, or Board of
Arbitration, shall be put into execution within a reasonable time,
and failure to do so, unless for explainable cause, shall convict the
delinquent party of disloyalty to the agreement. The party in error
shall be notified of the charge, and suitable discipline imposed. The
chief deputy of each party shall be held responsible in the first in-
stance for enforcement of decisions or adjustments herein referred
to, and shall be held answerable, primarily, to the trial board.
SECTION III. RATES AND HOURS
Schedules Of Piecework Rates
The prices and rates of pay that are to be in force during the
life of this agreement are set forth in the schedules prepared for that
purpose, duly authenticated by the proper signatures, which are
made a part hereof.
Hours of Work
The hours of work in the tailor shops shall be forty-nine per week,
with the Saturday half holiday.
Minimum Wage
The minimum-wage scale in the tailor shop shall be as follows :
1ST 2D 3D
Month Month Month
Machine operators (male and female) $5.00 $7.00 $9.00
Women in handwork sections . . . 5.00 6.00 8.00
Men, 18 years and over, not operators 8.00 10.00 12.00
All men not included in above . . . 8.00 9.00 10.00
Inspector tailors (men) 16.00
Overtime
For work done in excess of the regular hours per day, overtime
shall be paid to pieceworkers of 50 per cent in addition to their
piecework rates ; to the week-workers at the rate of time and a half ;
S44 TRADE UNIONISM AND LABOR PROBLEMS
no work shall be allowed on Sundays or legal holidays. Christmas,
New Year's, Decoration Day, Fourth of July, Labor Day, and
Thanksgiving Day shall be observed as holidays.
Week-Wokkers' Scale
It is agreed that the question of classified wage scale and periodical
increase of pay for service shall remain in the hands of Messrs. Mul-
lenbach, Campbell, and Marimpietri, to whom it was referred by
the Conference Committee, until they are ready to report.
The week-work schedule as agreed on by the Committee, which
has been accepted and signed by both the parties hereto, is hereby
made a part of this agreement, subject to any changes that may be
made as provided for above.
Piece-Rate Committee
Whenever a change of piece rate is contemplated the matter shall
be referred to a specially appointed Rate Committee, who shall fix
the rate according to the change of work. If the committee dis-
agree, the Trade Board shall fix the rate. In fixing the rates the
Board is restricted to the following rule :
Changed rates must correspond to the changed work, and new
rates must be based upon old rates where possible.
Hour Rates for Pieceworkers
In case workers are changed from piece to hour work, the hour
rates for such pieceworkers shall be based on their earnings on
piecework.
Changing Operations
In the event a pieceworker is required to change his mode of
operation so that it causes him to lose time in learning, his case may
be brought to the Rate Committee for its disposition.
HART SCHAFFNER & MARX AGREEMENT S4S
SECTION IV. PREFERENCE
The Preferential Shop
It is agreed that the principle of the preferential shop "shall prevail,
to be applied in the following manner :
Preference shall be applied in hiring and discharge. Whenever
the employer needs additional workers, he shall first make application
to the union, specifying the number and kind of workers needed.
The union shall be given a reasonable time to supply the specified
help, and if it is unable or for any reason fails to furnish the required
people, the employer shall be at liberty to secure them in the open
market as best he can.
In like manner, the principle of preference shall be applied in case
of discharge. Should it at any time become necessary to reduce the
force in conformity with the provisions of this agreement, the first
ones to be dismissed shall be those who are not members of the
union in good and regular standing.
Discipline of Union Members
The Trade Board and Board of Arbitration are authorized to hear
complaints from the union concerning the discipline of its members
and to take any action necessary to conserve the interests of the
agreement. The members referred to herein are those who have
joined, or who may hereafter join, the Amalgamated Clothing
Workers of America.
Preference in Transfers
If it becomes necessary to transfer workers from one shop to an-
other, the nonunion workers shall be the first to be transferred, unless,
at request of the foreman, union workers are willing to go.
Or if it becomes necessary in the judgment of the company to
transfer a worker from a lower to a higher paid section or. operation,
it is agreed that union workers shall have preference in such transfers.
Provided, that nothing herein shall be construed to be in conflict
with the provision relating to transfer for discipline, and provided,
that they are qualified to perform the work required and that their
departure from their section does not work to the disadvantage of
that section.
546 TRADE UNIONISM AND LABOR PROBLEMS
Overcrowding of Sections
Overcrowding of sections is important in this agreement as the
point at which the provision for preference becomes operative. It
is agreed that when there are too many workers in a section to per-
mit of reasonably steady employment, a complaint may be lodged
by the union, and if proved, the nonunion members of the section,
or as many of them as may be required to give the needed relief,
shall be dismissed. For the purpose of judging the application of
preference the Trade Board shall take into consideration the actual
employment condition in the section, as to whether there are more
people employed at the time of complaint than are needed to do the
work, and whether they, or any of them, can be spared without sub-
stantial injury to the company. If it is found that the section can be
reduced without substantial injury, the Trade Board shall enforce
the principle of preference as contemplated in the agreement.
Avoidance of Injury
Among the things to be considered in the enforcement of pref-
erence are the need of maintaining an adequate balance of sections,
or the requirements of the busy season, the difficulty of hiring
substitutes, and the risk of impairing the efficiency of the organiza-
tion. The claims for enforcement of preference and for avoidance of
injury to the manufacturing organization are to be weighed by the
Trade Board, and the interests of both claims safeguarded as far as
possible, the intention being to enforce preference so far as it can
be done without inflicting substantial injury on the company.
Preference of Seniority
If in order to properly balance sections a reduction of force be
required greater than can be secured by the laying off of a nonunion
worker as provided for herein, then there may be laid off those who
are members of the union in the order of their seniority who have
been in the employ of the company for a period of six months or less,
provided that any exceptionally efficient worker, or any especially
valuable member of the union, may be exempted from the rule of
seniority. Provided, also, the company shall give notice to the chief
deputy of its intention to discharge under this clause, and if he fails
to agree the matter shall be referred to the Trade Board.
HART SCHAFFNER & MARX AGREEMENT $47
SECTION V. WORKING CONDITIONS
Discipline
The full power of discharge and discipline remains with the com-
pany and its agents ; but it is understood that this power should
be exercised with justice and with due regard for the reasonable rights
of the employee, and if an employee feels that he has been unjustly
discharged, he may have appeal to the Trade Board, which shall
have the power to review the case.
Every person suspended shall receive a written notice directing
him to appear at the office of the company for a decision. Every
suspension notice properly presented to the discipline officer of
the company must be disposed of within six working hours from
the time of its presentation, and a definite decision announced
to the suspended person.
Stoppages
In case of a stoppage of work in any shop or shops, a deputy from
each side shall immediately repair to the shop or shops in question.
If such stoppage shall occur because the person in charge of the
shop shall have refused to allow the people to continue work, he shall
be ordered to immediately give work to the people, or in case the em-
ployees have stopped work, the deputies shall order the people to
immediately return to work, and in case they fail to return to work
within an hour from such time, such people shall be considered as
having left the employ of the corporation and shall not be entitled
to the benefit of these rules.
Detention in Shop
Workers shall not be detained in the shops when there is in-
sufficient work for them. The company or its agent shall exercise due
foresight in calculating the work available, and as far as practicable
shall call only enough workers into the factory to do the work at
sight. And if a greater number report for work than there is work
for, those in excess of the number required shall be promptly notified
and permitted to leave the shop. The work on hand shall be divided
as equally as may be between the remaining workers.
548 TRADE UNIONISM AND LABOR PROBLEMS
Complaint Slips
Before or at the time of entering any complaint against any em-
ployee in the complaint book said employee shall be notified thereof
so he may have the opportunity of notifying a deputy of the Board
and have said complaint investigated.
Lay-offs
Workers who are dismissed may be given lay-off memoranda
allowing them to return to their shops or factories, trimming or
cutting rooms, when there is need for their services. Provided, this
clause shall not be construed to give such worker precedence over
union members, or to interfere in any way with the provision for
preference in hiring.
Transfer of Employees
The company has the right to transfer employees for purposes of
administration or discipline, subject to review by the Trade Board.
If the Board finds that any transfer is being made to lower wages,
or for any discrimination or improper purpose, or if injustice is being
done the worker by the transfer, the Board may adjust the complaint.
SECTION VI. GENERAL PROVISIONS
Lay-off of Workers
No union member who is a permanent worker shall be laid off in
the tailor shops except for cause, whether in the slack or busy season,
except as provided herein. Cause for temporary lay-off may be al-
ternation of working periods in slack times, reorganization or reduc-
tion of sections, lawful discipline, and such other causes as may be
provided for herein or directed by the Trade Board.
Cooperation to Abolish Waiting
The company and the deputies have agreed to cooperate to abolish
all unnecessary waiting in the shops.
Division of Work
During the slack season the work shall be divided as nearly as is
practicable among all hands.
HART SCHAFFNER & MARX AGREEMENT 549
Abandonment of Position
Whenever any employee shall have absented himself from his
accustomed place without giving an acceptable reason to the foreman
or other officers in charge of his work before the end of the second
business day of his absence, the employer may consider his position
forfeited. Notice of absence and reason therefor must be given to
foreman by messenger, mail, or telephone.
Abolishment of Section
When sections are abolished, the company and its agents shall
use every effort to give the displaced workers employment as much
as possible like the work from which they were displaced, within a
reasonable time.
Sickness
Any workers who are absent on account of sickness shall be re-
instated in their former positions if they return within a reasonable
time.
Trade-Board Members
Complaints against members of the Trade Board as workmen,
are to be made by the foremen to the Trade Board. Any action
of any employee as a member of the Trade Board shall not be con-
sidered inimical to his employment with the corporation. No member
of a Trade Board shall sit on a case in which he is interested, or to
which he is a party.
Union Membership
The provisions for preference made herein require that the door
of the union be kept open for the reception of nonunion workers.
Initiation fee and dues must be maintained at a reasonable rate, and
any applicant must be admitted who is not an offender against the
union and who is eligible for membership under its rules. Provided,
that if any rules be passed that impose an unreasonable hardship,
or that operate to bar desirable persons, the matter may be brought
before the Trade Board or Board of Arbitration for such remedy as
it may deem advisable.
550 TRADE UNIONISM AND LABOR PROBLEMS
The Old Agreement
The provisions of the old agreement and the decisions based thereon
shall be regarded as being in force except as they may be modified
by, or are not in conflict with, the provisions of the present agreement.
SECTION VII. LOYALTY TO THE AGREEMENT
Experience suggests that there are certain points of strain which
it would be wise to recognize in advance and to safeguard as far as
possible. Among the points to be safeguarded are the following :
1. When dissatisfaction arises over change of price or working
conditions, it is believed that the agreement provides a remedy for
every such grievance that can arise, and all complainants are urged
and expected to present their cases to the proper officials and await
an adjustment. If anyone refuses to do this, and instead takes the
law in his own hands by inciting a stoppage or otherwise foments
dissatisfaction or rebellion, he shall, if convicted, be adjudged guilty
of disloyalty to the agreement and be subject to discipline by the
Trade Board.
2. Strain may arise because of unsatisfactory personal relations
between workers and officials. The company's officials are subject
to the law as are the workers, and equally responsible for loyalty in
word and deed, and are subject to discipline if found guilty of vio-
lation. Any complaints against them must be made and adjudicated
in the regular manner. They are to respect the workers and be
respected by them in their positions and supported in the proper
discharge of their duties. Anyone indulging in improper language
or conduct calculated to injure them or to break down their authority
in the shop shall be adjudged guilty of disloyalty and disciplined
accordingly.
3. Officials of the union are equally under the protection of the
agreement when in the exercise of their duties as are the officials of
the company, and any words or acts tending to discredit them or the
union which they represent, or which are calculated to injure the
influence or standing of the union or its representatives, shall be
considered as disloyalty to the agreement, and the offender shall be
subject to discipline by the Trade Board, provided, however, that
HART SCHAFFNER & MARX AGREEMENT 551
no reasonable criticism or expression of disagreement expressed in
proper language shall be deemed a violation within the meaning of
this section.
4. If any worker shall willfully violate the spirit of the agreement
by intentional opposition to its fundamental purposes, and especially
if he carry such willful violation into action by striking and inciting
others to strike or stop work during working hours, he shall, if charge
is proven, be subject to suspension, discharge, or fine. Provided,
that if a fine is imposed, its amount shall be determined by the
chairman of the Trade Board and shall not be less than $1 or more
than $5 for each offense.
5. If any foreman, superintendent, or agent of the company shall
willfully violate the spirit of this agreement, and especially if he fails
to observe and carry out any decision of the Trade Board or Board
of Arbitration, he shall, if charge is proven, be subject to a fine of
not less than $10 or more than $100 for each offense, at the discretion
of the chairman of the Trade Board.
SECTION VIII. CUTTING AND TRIMMING DEPARTMENTS
The cutting and trimming departments shall be subject to the
general provisions of this agreement, and to the bases and provisions
of the old agreement except as they may be modified by, or found to
be in conflict with, the special provisions agreed on for these depart-
ments. It is understood that these special provisions are intended to
change certain features of the old agreement, and if they are found
to be in conflict, the new provisions are to be considered as the guide
of practice and as representing the latest and, therefore, the most
authoritative expression of the wills of the parties hereto. The new
special provisions are as follows :
1. The principle of preference as applied in the cutting and trim-
ming rooms shall be as before, except that the clause relating to
cutters who are exempted from union obligations is expressly defined
as being strictly limited to the individuals now on the exemption list.
Should the number on that list be for any reason reduced, it is
understood that no other cutters and trimmers can be added.
2. The company shall not reduce the wages of any cutter. The
company shall report to the commission all failures of cutters to
552 TRADE UNIONISM AND LABOR PROBLEMS
produce their quota of work when in its judgment the delinquency is
not caused by the conditions of the work. The commission shall
investigate the matter and advise with the cutter concerning it.
At the end of a period sufficiently long to determine the merits of
the case, the cutters' commission shall, if it deem necessary, find
measures to discipline cutters to conform to their production. In
judging the merits in such instances the commission shall use the
principle of comparative efficiency.
3. All cutters whose present wages are less than $26 per week shall
receive an increase of $1 per week. This increase shall not be taken
into account by the commission in calculating the quota of work
required by such cutter.
4. The company shall prefer men now in the trimming room
when increasing the number of apprentice cutters.
5. The salaries of experienced cutters who are employed tempo-
rarily shall for the first two weeks be at a rate not less than the
salaries they received in their last position. After two weeks the tem-
porary cutters shall be paid on the same basis as the regular men,
their salary to be fixed by the cutters' commission on the basis of
their production and their comparative efficiency.
6. The company shall continue the practice of paying cutters for
Christmas, New Year's, Decoration Day, Fourth of July, Labor Day,
and Thanksgiving Day.
Paper-Cutting Department
All men who cut paper patterns shall be members of the union ;
except that, by special agreement, one man, Mr. Lindsay, may be
exempted from such requirement, and shall be added to the existing
exempted group.
The three apprentices now in the paper-cutting department shall
have the status, privileges, and protection of the regular cutting-
room apprentices, including the right to learn all branches of the
trade, and be subject to the same requirements and provisions. The
ratio of apprentices to cutters in the paper-cutting department shall
not exceed that which obtains now; namely, three apprentices to
seven permanent cutters.
The company may employ such other boy help in this depart-
ment as is needed, and such boys may, at its option, be promoted to
HART SCHAFFNER & MARX AGREEMENT 553
positions as apprentices when vacancies arise, but not in excess of
the total number of apprentices provided for in the agreement.
Permanent graders employed in the grading department may
work at paper cutting temporarily when there is not sufficient work
in their own department. Boys who are not apprentices shall not
take the places of blockers in any permanent manner, but they may
for short times, to fill odd unemployed hours, be permitted to try to
do blocking in the slack seasons.
Damage Department
All employees in the damage department who recut parts of gar-
ments shall be members of the union or exempted men. The man-
ager of the department and helpers who do not cut parts shall not
be members of the union.
Trimming Department
1. All men now on the trimmers' pay roll who are receiving not
to exceed $15 are to be increased $2 per week. AH men receiving
a weekly wage of over $15 and not exceeding $20 shall receive an
increase of $1 per week ; except that apprentice trimmers having
been employed less than six months are to receive an increase of
$1 per week.
2. The following periodical increases shall be granted during the
term of this agreement: Men receiving under $12 shall receive an
increase of |i per week every three months until their wages shall be
$12 per week. Men receiving over $12 and less than $18 shall receive
an increase of $1 every six months until their wages shall be $18 per
week. Men receiving over $18 per week and less than $20 shall re-
ceive an increase of $1 per week every year until their wages shall be
$20 per week.
3. All men starting to work on the band-saw machines shall re-
ceive not less than $18 per week and shall receive an increase of
$1 per week every six months until their wages are $20. There-
after they shall receive an increase of $1 per week every year until
they reach the rate of $24. No man shall be assigned to the
band-saw machine permanently until he has been employed in the
trimming room two years.
554 TRADE UNIONISM AND LABOR PROBLEMS
4. So far as practicable, the apprentices in the trimming room
shall begin on their work on the lower grades of the trade and shall
be advanced gradually to the more difficult ones.
5. Apprentices shall not be permanently transferred to work
requiring the use of any electric machines until they have been
employed for one year or more.
6. The wages of experienced men employed shall be determined
in the same manner as in the cutting room.
7. The jack boys and canvas pickers are to be under the juris-
diction of the union, with this express provision: That these two
sections are not to be under the agreed scale for trimmers, but are
to be subject to a special scale of wages, which scale is to be subject
to the decision of the Board of Arbitration.
THE EXPERIENCE OF HART SCHAFFNER & MARX WITH
COLLECTIVE BARGAINING^
During the past four years this company has concerned itself
very deeply in developing its relations with its employees. Labor
disturbances brought keenly to our attention the necessity of having
the good will of the workers in order that we might maintain and
preserve the good will of our customers and insure the stability of
our business.
We are glad to give an outline of our experience, believing it has
yielded results in the form of certain principles of policy and action
which may be helpful in the promotion of industrial peace.
In making this statement we are particularly concerned that the
formal and external features of our plan shall not be confused with
the real and vital substance of the arrangements, to the neglect of
the spirit and of the principles which are in reality responsible for
whatever progress we have made.
After an opportunity of several years to study causes and effects
we are convinced that the prime source of difficulty was a lack of
contact and understanding between our people and ourselves. The
failure to adjust petty grievances and abuses became the cause of
irritation entirely disproportionate to their importance when taken
1 Prepared for the Federal Industrial Relations Commission as a part of testi-
mony for the hearing at Washington, April, 1914.
HART SCHAFFNER & MARX AGREEMENT 555
singly, but which in accumulation became the main ground for
complaint.
There was no special complaint against the hours of work, which
were fifty- four per week,, and which have since been reduced to
fifty-two. The physical working conditions were good and in fact
very far advanced compared with the general conditions in the
industry. There was a general demand for higher wages, but we
have always looked upon this as an accompanying demand rather
than a first cause of difficulty.
A settlement was reached by an agreement to arbitrate, one
arbitrator to be named by each side and the two to choose a third.
It was not possible to agree upon the third member and the efforts
to arbitrate were started with only the two partisan men on the
board. This proved to be a good thing. For the time being it forced
us to settle matters by agreement and compromise rather than by
arbitrary decision, and this method has become a distinctive feature
of the whole system. A third arbitrator was eventually chosen, and
he is a man peculiarly capable of aiding in creating sympathetic
understanding on the part of all.
Favorable results did not appear at once, but were the natural
and legitimate effects of various devices introduced to meet diffi-
cult situations as they arose, and of certain principles of fair deaUng,
into harmony with which we have attempted to bring our business
policies.
In addition, the company created a labor department. A univer-
sity professor, trained in economics, was engaged to study the
situation and draft a plan for promoting better relations with our
employees. At the beginning the task appeared stupendous, as
grievances were highly magnified and exaggerated by frequent re-
iteration of the more radical leaders for the purpose of keeping the
war spirit at a high temperature.
This new department, headed by Professor Earl Dean Howard of
Northwestern University, gradually assumed certain functions in
which the workers had a direct interest and administered them with
the main purpose always in view. The chief duties of the labor
department now are: the maintenance of a system for the prompt
discovery and investigation of any abuses or complaints existing
anywhere among the employees ; the recommendation of measures
556 TRADE UNIONISM AND LABOR PROBLEMS
designed to eliminate the source of the complaint ; protecting the
company's interests in the Board of Arbitration and the Trade
Board (a court of first instance established to adjust complaints
and interpret the agreements) ; negotiating with the business agents
of the unions and satisfying their demands as far as possible; ad-
ministering all discipline for all the factories (all executives have
been relieved of this function); general oversight of all hiring; the
maintenance of hospital and rest rooms ; the administration of a
charity fund for unfortunate employees, of a loan fund, and of the
Workman's Compensation Act ; responsibility for the observance of
the state and municipal laws regarding child labor, health and safety,
also for the strict observance of all agreements with the unions or de-
cisions of the two Boards ; education of the foremen and people in
courtesy, patience, mutual helpfulness, and other peace-producing
qualities ; suggesting devices for the amelioration of hardships inci-
dental to the industry and for the higher efficiency of operating.
Industrial peace will never come so long as either employer or
employee believes that he is deprived of rights honestly belong-
ing to him. Our experience has taught that the business man in
authority is a trustee of various interests, including his own, and if
he administers his business so as to conserve and harmonize these
interests to the best of his ability, he is most likely building an
enduring success.
A labor department critical of everything touching the interests of
the workers, a Trade Board and a Board of Arbitration constantly
reviewing and discussing policies and methods, protect us against
ourselves and make it impossible to violate or overlook the rights
of the employees. These agencies undoubtedly create limitations
which at times seem vexatious, but we have found that in the long
run legitimate progress has been helped rather than hindered thereby.
Innumerable cases have arisen where we have been obliged to
change plans and policies much against our will, yet where the final
results were better because of the change.
Arbitration and conciliation should be applied to all departments
of a business wherever there is a conflict of interest. If nothing
more, it insures exhaustive discussion of every matter of importance,
gives everybody an opportunity to express his opinions, frequently
brings to light valuable suggestions, and makes possible a higher
HART SCHAFFNER & MARX AGREEMENT 557
degree of cooperation and teamwork. It is a method to be em-
ployed continuously to secure harmony and satisfaction. Patience
and self-control are essential in administering a business on this
basis. It is human nature to resent interference and to desire un-
restricted liberty of action, but these conditions are not necessary
and are often inimical to true success. Few men can use unlimited
power wisely, and no wise man will dispense with checks which tend
to keep him in the right path ; certainly he will approve of checks
calculated to restrain his agents from arbitrary and unjust acts
toward fellow employees.
The application of these ideas to the labor problem, especially
as a help to the employer in deciding what attitude to take toward
trade-unionism, has produced favorable results with us. If the em-
ployer voluntarily limits his own authority and agrees to conduct
his business according to the rule of reason and even-handed justice
as interpreted by an outside authority, such as an arbitration board,
he must insist that the organized employees submit to the same
limitation, otherwise his sacrifice will be futile and his submission
to injustice cowardly.
Unions should be recognized and favored in the same propor-
tion as they manifest a genuine desire to govern themselves effi-
ciently. All agreements should be so drawn as to release the employer
from his obligations whenever the unions fail to observe theirs.
Arbitration boards, officials in charge of labor matters, and union
leaders should direct their operations and make their decisions with
the one purpose always in mind ; namely, to make it profitable and
easy for all parties to acquiesce in the rule of reason and justice,
and dangerous and difficult for them to attempt to get unjust
advantage. We did not realize, and we believe the majority of
employers do not yet realize, the extent to which the attitude and
conduct of their organized employees reflect their own policies and
conduct. Strict adherence to justice, especially if interpreted to the
people by a board in whom they have confidence, will gradually
educate them and their leaders to see the advantage of this method.
It is fortunate for the employer if his own employees have an auton-
omous organization, influenced as little as possible by outsiders.
In our own business, employing thousands of persons, — some of
them newly arrived immigrants, some of them in opposition to the
558 TRADE UNIONISM AND LABOR PROBLEMS
wage system, hostile to employers as a class, — we have observed
astonishing changes in their attitude during three years under the
influence of our labor arrangements. They seem to understand that
they can rely upon promises made to them by the company ; that all
disputes will be finally adjusted according to just principles inter-
preted by wise arbitrators.
Disciplinary methods are a prolific source of dispute with em-
ployees, and it is difficult to avoid offending their sense of justice,
especially if they are not fully informed of all the facts in the case
and hear only one side. Moreover, petty officials are not likely to
show good judgment in administering disciplinary power or to have
correct theories about it : very frequently they are tempted to satisfy
private dislikes under pretense of disciplining. We regard it as an
essential element in maintaining industrial peace to centralize the
administration of discipline in one official having no interest except
to maintain the efficiency of the shops without disturbing the harmony
and good will of the people.
Our theory of discipline is that it should be as mild as possible
consistent with effectiveness in securing the desired results. Com-
plaint memoranda are given as warnings by the foreman ; if these
are disregarded, suspension slips are next given, which remove the
offenders from the pay roll until reinstated by the discipline officer.
An investigation is made, and, as a rule, the suspended person is
restored to his position on probation. This method is continued until
it becomes apparent that the employee is either hopelessly incom-
petent or insubordinate, whereupon a temporary lay-off or discharge
may follow. Our Trade Board, composed of workmen and foremen,
presided over by a neutral, outside chairman, will give a hearing
to the case if requested, and may order a reinstatement or modi-
fication of the penalty. Appeal from this tribunal may be taken to
the Board of Arbitration for final adjudication. In spite of its
apparent complexity the administration of discipline has become very
satisfactory to both sides, and very few cases even come before the
Trade Board and for many months none have been appealed.
Much depends upon the leaders of the workers. We have had
some experience with misinformed and self-seeking men who secured
temporary influence over the people, but somehow they failed to
thrive in the atmosphere of our arrangement. Some of these same
HART SCHAFFN.ER & MARX AGREEMENT 559
men have been delivered of their worst qualities as they have learned
the advantage of better methods of dealing. The system seems to
work out a selection of the fittest candidates and trains them to be-
come efficient leaders and executives, skilled in negotiation, in plead-
ing and cross-examination before the judicial boards, in organizing,
disciplining, and leading the people. One of the leaders in particular
developed a wonderful influence over all who came in contact with
him on account of his high ideals, his patience under trying cir-
tumstances, and his indomitable faith in the ultimate success of
right method.
At the beginning of our experiment we believed that the labor
union was a competitor for the good will of the pieople and that both
could not have this good will at the same time ; we feared that the
union would get the credit for anything granted to the people, thus
nullifying the good effect to the company of any concessions or
benefits given to them. Concessions wrung from the reluctant
employer by the union through a Board of Arbitration, especially
if the withholding of the concession seems contrary to the sense
of justice of the workers, of course gain no good will for the
company.
Without some kind of organization among the people there are
no responsible and authorized representatives with whom to deal,
and the real interests of the people as they see them themselves are
likely to be overlooked or disregarded. The chosen representatives
are made to feel the dignity and honor of their positions so long as
they deal fairly and reasonably ; those who adopt a different policy
invariably fail and retire with considerable loss of respect and
prestige. Those whose motives are good and who can reason intel-
ligently grow in the esteem of their fellows through their success in
negotiation and arbitration. They appreciate the consideration shown
them by the company and the arbitrators and reciprocate by pro-
claiming the fairness of the company.
One of the most important functions of our labor department is
welfare work, — giving advice and material assistance to unfortunate
employees, improving the working conditions in the shops, maintain-
ing rest rooms and libraries, etc.,— but this is not done for the purpose
of more easily depriving the workers of their right to be represented
in all matters in which their interests are involved. Workingmen
S6o TRADE UNIONISM AND LABOR PROBLEMS
are quick to resent the substitution of favors for justice. Welfare
work, however, in connection with general fair dealing, is very
effective in securing good will, especially if it increases the
personal contact between the officials of the company and the
employees.
Not the least of the advantages we have derived from our system
is the reaction of the ideas and ideals, first applied in the labor
department, upon the other departments, and particularly upon the
executive staff of the manufacturing department. Inefficient methods'
of foremen, lack of watchful supervision, and inaccurate information
as to prevailing conditions on the part of higher executives, — these
could not long survive when every complaint brought by a work-
man was thoroughly investigated and the root cause of the trouble
brought to light.
The unexpected and indirect results of our labor policy in increas-
ing the efficiency, reforming the conduct, and raising the intelli-
gence of the executives coming into contact with the system have
been as profitable and satisfactory as the direct result, i.e. the crea-
tion of harmony and good will on the part of the people toward
the company.
A summary of the essentials of the system which has produced
such gratifying results in our institution would include: a labor
department, responsible for industrial peace and good will of the
employees, thereby of necessity fully informed as to their sentiments,
their organizations, and really representing their interests in the
councils of the company ; a means for the prompt and final settle-
ment of all disputes ; a conviction in the minds of the employees that
the employer is fair and that all their interests are safeguarded;
constant instruction of the leaders and people in the principles of
business equity, thus gradually evolving a code accepted by all parties
in interest, serviceable as a basis for adjustment of all difficulties;
the development of efficient representation of the employees — honest,
painstaking, dignified, reasonable, eager to cooperate in maintaining
peace, influential with their people, and truly representative of their
real interests ; a friendly policy toward the union so long as it is con-
ducted in harmony with the ethical principles employed in the busi-
ness and an uncompromising opposition to all attempts to coerce or
impose upon the rights of any group or to gain an unfair advantage;
HART SCHAFFNER & MARX AGREEMENT 561
and a management that guarantees every man full compensation
for his efficiency and prevents anyone's receiving anything he has
not earned.
Briefly expressed, it is simply the natural and healthy relation
which usually exists between the small employer and his half-dozen
workmen, artificially restored, as far as possible in a large-scale
business where the real employer is a considerable group of execu-
tives managing thousands of workers according to certain established
principles and policies.
Hart Schaffnee & Marx
XXXVI
AMERICAN FEDERATION OF LABOR RECONSTRUC-
TION PROGRAM^
THE World War has forced all free peoples to a fuller and
deeper realization of the menace to civilization contained in
autocratic control of the activities and destinies of mankind.
It has caused a world-wide determination to overthrow and eradi-
cate all autocratic institutions, so that a full measure of freedom and
justice can be established between man and man and nation and
nation.
It has awakened more fully the consciousness that the principles
of democracy should regulate the relationship of men in all their
activities.
It has opened the doors of opportunity through which more
sound and progressive policies may enter.
New conceptions of human liberty, justice, and opportunity are
to be applied.
The American Federation of Labor, the one organization repre-
senting labor in America, conscious that its responsibilities are now
greater than before, presents a program for the guidance of labor,
based upon experience and formulated with a full consciousness of
the principles and policies which have successfully guided Ameri-
can trade-unionism in the past.
DEMOCRACY IN INDUSTRY
Two codes of rules and regulations affect the workers: the law
upon the statute books and the rules within industry.
The first determines their relationship as citizens to all other
citizens and to property.
1 This program was drafted by the Committee on Reconstruction appointed
by instruction of the Convention of the American Federation of Labor, held at
St. Paul, Minnesota, June 10-20, 1918. The program was unanimously in-
dorsed by the Executive Council of the American Federation of Labor.
562
AMERICAN FEDERATION OF LABOR PROGRAM 563
The second largely determines the relationship of employer and
employee, the terms of employment, the conditions of labor, and
the rules and regulations affecting the workers as employees. The
first is secured through the application of the methods of democracy
in the enactment of legislation, and is based upon the principle that
the laws which govern a free people should exist only with their
consent.
The second, except where effective trade-unionism exists, is estab-
lished by the arbitrary or autocratic whim, desire, or opinion of
the employer, and is based upon the principle that industry and
commerce cannot be successfully conducted unless the employer
exercises the unquestioned right to establish such rules, regulations,
and provisions affecting the employees as self-interest prompts.
Both forms of law vitally affect the workers' opportunities in
life and determine their standard of living. The rules, regulations,
and conditions within industry in many instances affect them more
than legislative enactments. It is, therefore, essential that the
workers should have a voice in determining the laws within industry
and commerce which affect them equivalent to the voice which they
have as citizens in determining the legislative enactments which
shall govern them.
It is as inconceivable that the workers as free citizens should
remain under autocratically made law within industry and commerce
as it is that the nation could remain a democracy while certain
individuals or groups exercise autocratic powers.
It is, therefore, essential that the workers everywhere should
insist upon their right to organize into trade-unions, and that
effective legislation should be enacted which would make it a criminal
offense for any employer to interfere with or hamper the exercise of
this right or to interfere with the legitimate activities of trade-unions.
UNEMPLOYMENT
Political economy of the old school, conceived by doctrinaires,
was based upon unsound and false doctrines, and has since been
used to blindfold, deceive, and defeat the workers' demands for
adequate wages, better living and working conditions, and a just share
of the fruits of their labor.
5 64 TRADE UNIONISM AND LABOR PROBLEMS
We hold strictly to the trade-union philosophy and its developed
political economy based upon demonstrated facts.
Unemployment is due to underconsumption. Underconsximption
is caused by low or insufficient wages.
Just wages will prevent industrial stagnation and lessen periodical
unemployment.
Give the workers just wages and their consuming capacity is
correspondingly increased. A man's ability to consume is controlled
by the wages received. Just wages will create a market at home
which will far surpass any market that may exist elsewhere and
will lessen unemployment.
The employment of idle workmen on public work will not per-
manently remove the cause of unemplojanent. It is an expedient
at best.
There is no basis in fact for the claim that the so-called law of
supply and demand is natural in its operations and impossible of
control or regulation.
The trade-union movement has maintained standards, wagra,
hours, and life in periods of industrial depression and idleness. These
in themselves are a refutation of the declared immutability of the
law of supply and demand.
There is, in fact, no such condition as an iron law of wages based
upon a natural law of supply and demand. Conditions in commerce
and industry, methods of production, storing of commodities, regu-
lation of the volume of production, banking systems, the flow and
direction of enterprise influenced by combinations and trusts, have
effectively destroyed the theory of a natural law of supply and
demand as had been formulated by doctrinaire economists.
WAGES
There are no means whereby the workers can obtain and main-
tain fair wages except through trade-union effort. Therefore eco-
nomic organization is paramount to all their other activities.
Organization of the workers leads to better wages, fewer working
hours, improved working conditions ; it develops independence, man-
hood, and character ; it fosters tolerance and real justice and makes
for a constantly growing better economic, social, and political life
for the burden-bearing masses.
AMERICAN FEDERATION OF LABOR PROGRAM 565
In countries where wages are best the greatest progress has been
made in economic, social, and political advancement, in science, art,
literature, education, and in the wealth of the people generally.
All low-wage-paying countries contrasted with America is proof
for this statement.
The American standard of life must be maintained and improved.
The value of wages is determined by the purchasing power of the
dollar. There is no such thing as good wages when the cost of living
in decency and comfort equals or exceeds the wages received. There
must be no reduction in wages ; in many instances wages must be
increased.
The workers of the nation demand a living wage for all wage-
earners, skilled or unskilled— a wage which will enable the worker
and his family to live in health and comfort, provide a competence
for illness and old age, and afford to all the opportunity of culti-
vating the best that is within mankind.
HOURS OF LABOR
Reasonable hours of labor promote the economic and social well-
being of the toiling masses. Their attainment should be one of
labor's principal and essential activities. The shorter workday and a
shorter work-week make for a constantly growing, higher, and better
standard of productivity, health, longevity, morals, and citizenship.
The right of labor to fix its hours of work must not be abrogated,
abridged, or interfered with.
The day's working-time should be limited to not more than eight
hours, with overtime prohibited except under the most extraordinary
emergencies. The week's working-time should be limited to not
more than five and one half days.
WOMEN AS WAGE-EARNERS
Women should receive the same pay as men for equal work per-
formed. Women workers must not be permitted to perform tasks
disproportionate to their physical strength or which tend to impair
their potential motherhood and prevent the continuation of a na-
tion of strong, healthy, sturdy, and intelligent men and women.
S66 TRADE UNIONISM AND LABOR PROBLEMS
CHILD LABOR
The children constitute the nation's most valuable asset. The full
responsibility of the government should be recognized by such meas-
ures as will protect the health of every child at birth and during its
immature years.
It must be one of the chief functions of the nation through effec-
tive legislation to put an immediate end to the exploitation of
children under sixteen years of age.
State legislatures should protect children of immature years by
prohibiting their employment, for gain, under sixteen years of age
and restricting the employment of children of less than eighteen
years of age to not more than twenty hours within any one week
and with not less than twenty hours at school during the same period.
Exploitation of child life for private gain must not be permitted.
STATUS OF PUBLIC EMPLOYEES
The fixing of wages, hours, and conditions of labor for public
employees by legislation hampers the necessary exercise of organi-
zation and collective bargaining.
Public employees must not be denied the right of organization,
free activities, and collective bargaining, and niust not be limited
in the exercise of their rights as citizens.
COOPERATION
To attain the greatest possible development of civilization, it is
essential, among other things, that the people should never delegate
to others those activities and responsibilities which they are capable
of assuming for themselves. Democracy can function best with the
least interference by the state compatible with due protection to the
rights of all citizens.
There are many problems arising from production, transportation,
and distribution which would be readily solved by applying the
methods of cooperation. Unnecessary middlemen, who exact a tax
from the community without rendering any useful service, can be
eliminated.
AMERICAN FEDERATION OF LABOR PROGRAM 567
The farmers, through cooperative dairies, canneries, packing
houses, grain elevators, distributing houses, and other cooperative
enterprises, can secure higher prices for their products and yet place
these in the consumer's hcinds at lower prices than would otherwise
be paid. There is an almost limitless field for the consumers in
which to establish cooperative buying and selling, and in this most
necessary development the trade-unionists should take an immediate
and active part.
Trade-unions secure fair wages. Cooperation protects the wage-
earner from the profiteer.
Participation in these cooperative agencies must of necessity pre-
pare the mass of the people to participate more effectively in the
solution of the industrial, commercial, social, and political problems
which continually arise.
THE PEOPLE'S FINAL VOICE IN LEGISLATION
It is manifestly evident that a people are not self-governing unless
they enjoy the unquestioned power to determine the form and sub-
stance of the laws which shall govern them. Self-government can-
not adequately function if there exists within the nation a superior
power or authority which can finally determine what legislation,
enacted by the people or their duly elected representatives, shall be
placed upon the statute books and what shall be declared null
and void.
An insuperable obstacle to self-government in the United States
exists in the power which has been gradually assumed by the supreme
courts of the federal and state governments to declare legislation
null and void upon the ground that, in the court's opinion, it is
unconstitutional.
It is essential that the people, acting directly or through Congress
or state legislatures, should have final authority in determining
which laws shall be enacted. Adequate steps must be taken, there-
fore, which will provide that in the event of a supreme court
declaring an act of Congress or of a state legislature unconstitutional,
and the people, acting directly or through Congress or a state legisla-
ture, reenacting the measure, it shall then become the law with-
out being subject to annulment by any court.
S68 TRADE UNIONISM AND LABOR PROBLEMS •
POLITICAL POLICY
In the political efforts arising from the workers' necessity to se-
cure legislation covering those conditions and provisions of life not
subject to collective bargaining with employers, organized labor has
followed two methods : one by organizing political parties, the other
by the determination to place in public office representatives from
their ranks — to elect those who favor and champion the legislation
desired and to defeat those whose policy is opposed to labor's legis-
lative demands, regardless of partisan politics.
The disastrous experience of organized labor in America with
political parties of its own amply justified the American Federation
of Labor's nonpartisan political policy. The results secured by labor
parties in other countries never have been such as to warrant any
deviation from this position. The rules and regulations of trade-
unionism should not be extended so that the action of a majority
could force a minority to vote for or give financial support to any
political candidate or party to whom they are opposed. Trade-
union activities cannot receive the undivided attention of mem-
bers and officers if the exigencies, burdens, and responsibilities of a
political party are bound up with their economic and industrial
organizations.
The experiences and results attained through the nonpartisan
political policy of the American Federation of Labor cover a gen-
eration. They indicate that through its application the workers of
America have secured a much larger measure of fundamental legis-
lation— establishing their rights, safeguarding their interests, pro-
tecting their welfare, and opening the doors of opportunity — than
have been secured by the workers of any other country.
The vital legislation now required can be more readily secured
through education of the public mind and the appeal to its con-
science, supplemented by energetic independent political activity on
the part of trade-unionists, than by any other method. This is and
will continue to be the political policy of the American Federation
of Labor if the lessons which labor has learned in the bitter but
practical school of experience are to be respected and applied.
It is, therefore, most essential that the officers of the American
Federation of Labor, the officers of the affiliated organizations, state
AMERICAN FEDERATION OF LABOR PROGRAM 569
federations, and central labor bodies, and the entire membership of
the trade-union movement should give the most vigorous application
possible to the political policy of the American Federation of Labor
so that labor's friends and opponents may be more widely known
and the legislation most required readily secured. This phase of our
movement is still in its infancy. It should be continued and developed
to its logical conclusion.
GOVERNMENT OWNERSHIP
Public and semipublic utilities should be owned, operated, or
regulated by the government in the interest of the public.
Whatever final disposition shall be made of the railways of the
country in ownership, management, or regulation, we insist upon the
right of the workers to organize for their common and mutual pro-
tection and the full exercise of the normal activities which come with
organization. Any attempt at the denial by governmental authority
of the rights of the workers to organize, to petition, to representation,
and to collective bargaining, or the denial of the exercise of their
political rights, is repugnant to the fundamental principles of free
citizenship in a republic and is destructive of their best interest
and welfare.
The government should own and operate all wharves and docks
connected with public harbors which are used for commerce or
transportation.
The American Merchant Marine should be encouraged and de-
veloped under governmental control, and so manned as to insure
successful operation and protect in full the beneficent laws now on
the statute books for the rights and welfare of seamen. The sea-
men must be accorded the same rights and privileges rightfully
exercised by the workers in all other employments, public and
private.
WATERWAYS AND WATER POWER
The lack of a practical development of our waterways and the
inadequate extension of canals have seriously handicapped water
traffic and created unnecessarily high cost for transportation. In
many instances it has established artificial restrictions, which have
worked to the serious injury of communities, owing to the schemes
S70 TRADE UNIONISM AND LABOR PROBLEMS
of those controlling a monopoly of land transportation. Our navi-
gable rivers and our great inland lakes should be connected with the
sea by an adequate system of canals, so that inland production can
be more effectively fostered, the costs of transportation reduced, the
private monopoly of transportation overcome, and imports and
exports shipped at lower costs.
The nation is possessed of enormous water power. Legislation
should be enacted providing that the governments, federal and state,
should own, develop, and operate all water power over which they
have jurisdiction. The power thus generated should be supplied to
all citizens at rates based upon cost. The water power of the
nation, created by nature, must not be permitted to pass into
private hands for private exploitation.
REGULATION OF LAND OWNERSHIP
Agriculture and stock raising are essential to national safety and
well-being. The history of all countries, at all times, indicates that
the conditions which create a tenant class of agriculturists work
increasing injury to the tillers of the soil. While increasing the price
of the product to the consumer these conditions at the same time
develop a class of large landowners who contribute little, if anything,
to the welfare of the community, but who exact a continually in-
creasing share of the wealth produced by the tenant. The private
ownership of large tracts of usable land is not conducive to the best
interests of a democratic people.
Legislation should be enacted placing a graduated tax upon all
usable lands above the acreage which is cultivated by the owner.
This should include provisions through which the tenant farmer, or
others, may purchase land upon the lowest rate of interest and
most favorable terms consistent with safety, and so safeguarded by
governmental supervision and regulation as to give the fullest and
freest opportunity for the development of land-owning agriculturists.
Special assistance should be given in the direction of allotments of
lands and the establishment of homes on the public domain.
Establishment of government experimental farms, measures for
stock-raising instruction, the irrigation of arid lands, and reclama-
tion of swamp and cut-over lands should be undertaken upon a
larger scale under direction of the federal government.
AMERICAN FEDERATION OF LABOR PROGRAM 571
Municipalities and states should be empowered to acquire lands
for cultivation or the erection of residential buildings which they
may use or dispose of under equitable terms.
FEDERAL AND STATE REGULATION OF CORPORATIONS
The creation by legislative enactment of corporations, without
sufficient definition of the powers and scope of activities conferred
upon them and without provisions for their adequate supervision,
regulation, and control by the creative body, has led to the develop-
ment of far-reaching abuses which have seriously affected commerce,
industry, and the masses of the people through their influence upon
social, industrial, commercial, and political development. Legisla-
tion is required which will so limit, define, and regulate the powers,
privileges, and activities of corporations that their methods cannot
become detrimental to the welfare of the people. It is, therefore,
essential that legislation should provide for the federal licensing of
all corporations organized for profit. Furthermore, federal super-
vision and control should include the increasing of capital stock
and the incurring of bonded indebtedness, with the provision that
the books of all corporations shall be open at all times to federal
examiners.
FREEDOM OF EXPRESSION AND ASSOCIATION
The very life and perpetuity of free and democratic institutions
are dependent upon freedom of speech, of the press, and of assem-
blage and association. We insist that all restrictions of freedom of
speech, press, public assembly, association, and travel be completely
removed, individuals and groups being responsible for their utter-
ances. These fundamental rights must be set out with clearness and
must not be denied or abridged in any manner.
WORKMEN'S COMPENSATION
Workmen's compensation laws should be amended to provide
more adequately for those incapacitated by industrial accidents or
occupational diseases. To assure that the insurance fund derived
from commerce and industry will be paid in full to injured workers,
572 TRADE UNIONISM AND LABOR PROBLEMS
state insurance must supplant, and prohibit the existence of, em-
ployers' liability insurance operated for profit.
IMMIGRATION
Americanization of those coming from foreign lands, as well as
our standards of education and living, are vitally affected by the
volume and character of the immigration.
It is essential that additional legislation regulating immigration
should be enacted, based upon two fundamental propositions : namely,
that the flow of immigration must not at any time exceed the nation's
ability to assimilate and Americanize the foreigners coming to our
shores, and that at no time shall immigration be permitted when there
exists an abnormal degree of unemployment.
By reason of existing conditions we urge that immigration into
the United States should be prohibited for a period of at least two
years after peace has been declared.
TAXATION
One of the nation's most valuable assets is the initiative, energetic,
constructive, and inventive genius of its people. These qualities,
when properly applied, should be fostered and protected instead of
being hampered by legislation, for they constitute an invaluable
element of progress and material development. Taxation should,
therefore, rest as lightly as possible upon constructive enterprise.
Taxation should provide for full contribution from wealth by a tax
upon profits which will not discourage industrial or commercial
enterprise. There should be provided a progressive increase in taxes
upon incomes, inheritances, and upon land values of such a nature
as to render it unprofitable to hold land without putting it to use, to
afford a transition to greater economic equality, and to supply means
of liquidating the national indebtedness growing out of the war.
EDUCATION
It is impossible to estimate the influence of education upon the
world's civilization. Education must not stifle thought and in-
quiry, but must awaken the mind concerning the application of
natural laws and to a conception of independence and progress.
AMERICAN FEDERATION OF LABOR PROGRAM 573
Education must not be for a few but for all our people. While
there is an advanced form of public education in many states, there
still remains a lack of adequate educational facilities in several
states and communities. The welfare of the republic demands that
public education should be elevated to the highest degree possible.
The government should exercise advisory supervision over public
education, and where necessary maintain adequate public education
through subsidies without giving to the government power to hamper
or interfere with the free development of public education by the
several states. It is essential that our system^ of public education
should offer the wage-earners' children the opportunity for the
fullest possible development. To attain this end state colleges and
universities should be developed.
It is also important that the industrial education which is being
fostered and developed should have for its purpose not so much
training for efficiency in industry as training for life in an indus-
trial society. A full understanding must be had of those principles
and activities that are the foundation of all productive efforts.
Children should not only become familiar with tools and materials
but they should also receive a thorough knowledge of the principles
of human control, of force and matter underlying our industrial
relations and sciences. The danger that certain commercial and
industrial interests may dominate the character of education must
be averted by insisting that the workers shall have equal represen-
tation on all boards of education or committees having control over
vocational studies and training.
To elevate and advance the interests of the teaching profession
and to promote popular and democratic education, the right of the
teachers to organize and to affiliate with the movement of the
organized workers must be recognized.
PRIVATE EMPLOYMENT AGENCIES
Essentials in industry and commerce are employee and employer,
labor and capital. No one questions the right of organized capital
to supply capital to employers. No one should question the right
of organized labor to furnish workers. Private employment agencies
abridge this right of organized labor.
574 TRADE UNIONISM AND LABOR PROBLEMS
Where federal, state, and municipal employment agencies are
maintained they should operate under the supervision of joint com-
mittees of trade-unionists and employers, equally represented.
Private employment agencies operated for profit should not be
permitted to exist.
HOUSING
Child life, the workers' physical condition, and public health
demand that the wage-earner and his family shall be given a full
opportunity to live under wholesome conditions. It is not only
necessary that there shall be sanitary and appropriate houses to
live in but that a sufficient number of dwellings shall be available
to free the people from high rents and overcrowding.
The ownership of homes, free from the grasp of exploitive and
speculative interests, will make for more efficient workers, more
contented families, and better citizens. The government should,
therefore, inaugurate a plan to build model homes and establish a
system of credits whereby the workers may borrow money at a low
rate of interest and under favorable terms to build their own homes.
Credit should also be extended to voluntary non-profit-making hous-
ing and joint-tenancy associations. States and municipalities should
be freed from the restrictions preventing their undertaking proper
housing projects and should be permitted to engage in other neces-
sary enterprises relating thereto. The erection and maintenance
of dwellings where migratory workers may find lodging and nourish-
ing food during periods of unemployment should be encouraged and
supported by municipalities.
If need should arise to expend public funds to relieve unemploy-
ment, the building of wholesome houses would best serve the public
interests.
MILITARISM
The trade-union movement is unalterably and emphatically op-
posed to "militarism" or a large standing army. "Militarism" is
a system fostered and developed by tyrants in the hope of support-
ing their arbitrary authority. It is utilized by those whose selfish
ambitions for power and worldly glory lead them to invade and
subdue other peoples and nations, to destroy their liberties, to
AMERICAN FEDERATION OF LABOR PROGRAM S7S
acquire their wealth, and to fasten the yoke of bondage upon them.
The trade-union movement is convinced by the experience of man-
kind that "mihtarism" brutalizes those influenced by the spirit
of the institution. The finer elements of humanity are strangled.
Under "militarism" a deceptive patriotism is established in the
peoples' minds, where men believe that there is nobility of spirit
and heroism in dying for the glory of a dynasty or the maintenance
of institutions which are inimical to human progress and democracy.
" Militarism " is the application of arbitrary and irresponsible forces
as opposed to reason and justice. Resistance to injustice and tyranny
is that virile quality which has given purpose and effect to en-
nobling causes in all countries and at all times. The free institu-
tions of our country and the liberties won by its founders would have
been impossible had they been unwilling to take arms and if neces-
sary die in the defense of their liberties. Only a people willing to
maintain their rights and defend their liberties are guaranteed free
institutions.
Conditions foreign to the institutions of our country have pre-
vented the entire abolition of organized bodies of men trained to
carry arms. A voluntary citizen soldiery supplies what would other-
wise take its place, a large standing army. To the latter we are
unalterably opposed as tending to establish the evils of "milita-
rism." Large standing armies threaten the existence of civil liberty.
The history of every nation demonstrates that as standing armies
are enlarged the rule of democracy is lessened or extinguished.
Our experience has been that even this citizen soldiery, the militia
of our states, has given cause at times for grave apprehension. Their
ranks have not always been free from undesirable elements, particu-
larly the tools of corporations involved in industrial disputes.- During
industrial disputes the militia has at times been called upon to
support the authority of those who through selfish interests desired
to enforce martial law, while the courts were open and the civil
authorities competent to maintain supremacy of civil law. We insist
that the militia of our several states should be wholly organized and
controlled by democratic principles, so that this voluntary force of
soldiery may never be diverted from its true purpose and used to
jeopardize or infringe upon the rights and liberties of our people.
The right to bear arms is a fundamental principle of our government,
S76 TRADE UNIONISM AND LABOR PROBLEMS
a principle accepted at all times by free people as essential to the
maintenance of their liberties and institutions. We demand that this
right shall remain inviolate.
SOLDIERS AND SAILORS
Soldiers and sailors, those who entered the service in the nation's
defense, are entitled to the generous reward of a grateful republic.
The necessities of war called upon millions of workmen to leave
their positions in industry and commerce to defend, upon the battle-
fields, the nation's safety and its free institutions. These defenders
are now returning. It is advisable that they should be discharged
from military service at the earliest possible moment, that as civilians
they may return to their respective homes- and families and take up
their peace-time pursuits. The nation stands morally obligated to
assist them in securing employment.
Industry has undergone great changes due to the dislocation
caused by war production and transportation. Further readjust-
ments in industry and commerce must follow the rehabilitation of
business under peaceful conditions. Many positions which our citi-
zen soldiers and sailors filled previous to enlistment do not exist
today.
It would be manifestly unjust for the government, after having
removed the worker from his position in industry and placed him in
military service, to discharge him from the army or navy without
having made adequate provision to assist him in procuring employ-
ment and providing sustenance until employment has been secured.
The returned citizen soldier or sailor should not be forced by the
bitter urgent necessity of securing food and clothing to place himself
at a disadvantage when, seeking employment.
Upon their discharge, transportation and meals should be supplied
to their places of residence. The monthly salary previously paid
should be continued for a period not to exceed twelve months if
employment is not secured within that period.
The federal and state employment bureaus should be directed to
cooperate with trade-union agencies in securing employment for
discharged soldiers and sailors. In assisting the discharged soldier
and sailor to secure employment, government agencies should not
AMERICAN FEDERATION OF LABOR PROGRAM 577
expect them to accept employment for less than the prevailing rate
of wages being paid in the industry. Neither should any govern-
ment agency request or require such discharged men to accept em-
ployment where a trade dispute exists or is threatened. Nor should
the refusal on the part of any of these discharged soldiers or sailors
to accept employment where trade disputes exist or are threatened,
or when less than the prevailing wage rate is offered, deprive them
of a continuance of their monthly pay.
Legislation also should be enacted which will give the nation's
defenders the opportunity for easy and ready access to the land.
Favorable inducements should be provided for them to enter agri-
culture and husbandry.- The government should assume the re-
sponsibility for the allotment of such lands and supply the necessary
capital for its development and cultivation, with such safeguards as
will protect both the government and the discharged soldier and sailor.
CONCLUSION
No element in our nation is more vitally concerned with the
problems of making for a permanent peace between all nations than
the working people. The opportunities now before us are without
precedent. It is of paramount importance that labor shall be free
and unhampered in shaping the principles and agencies affecting the
wage-earners' condition of life and work.
By the light that has been given to it the American Federation of
Labor has attracted to its fold over three millions of wage-earners,
and its sphere of influence and helpfulness is growing by leaps and
bounds. By having followed safe and sound fundamental principles
and policies, founded on freedom, justice, and democracy, the Ameri-
can trade-union movement has achieved successes of an inestimable
value to the masses of toilers of our country. By adhering to these
principles and policies we can meet all problems of readjustment,
however grave in importance and difficult of solution, with a feeling
of assurance that our efforts will be rewarded by a still greater
success than that achieved in the past.
Given the whole-hearted support of all men and women of labor,
our organized labor movement with its constructive program, its love
for freedom, justice, and democracy, will prove the most potent
578 TRADE UNIONISM AND LABOR PROBLEMS
factor in protecting, safeguarding, and promoting the general wel-
fare of the great mass of our people during this trying period of
reconstruction and all times thereafter.
The American Federation of Labor has attained its present position
of dignity and splendid influence because of its adherence to one
common cause and purpose ; that purpose is to protect the rights and
interests of the masses of the workers and to secure for them a better
and a brighter day. Let us therefore strive on and on to bring into
our organizations the yet unorganized. Let us concentrate our efforts
to organize all the forces of wage-earners. Let the nation hear the
united demand from the laboring voice. Now is the time for the
workers of America to come to the stand of their unions and to organ-
ize as thoroughly and completely and compactly as is possible. Let
each worker bear in mind the words of Longfellow :
In the world's broad field of battle,
In the bivouac of Life,
Be not like dumb, driven cattle I
Be a hero in the strife!
PART V. THE LAW
XXXVII
LIBERTY OF CONTRACT^
" ' I "HE right of a person to sell his labor," says Mr. Justice Harlan,
X. "upon such terms as he deems proper is, in its essence, the
same as the right of the purchaser of labor to prescribe the conditions
upon which he will accept such labor from the person offering to sell
' it. So the right of the employee to quit the service of the employer, for
whatever reason, is the same as the right of the employer, for what-
ever reason, to dispense with the services of such employee. ... In
all such particulars the employer and the employee have equality of
right, and any legislation that disturbs that equality is an arbitrary
interference with the liberty of contract, which no government can
legally justify in a free land."^ With this positive declaration of a
lawyer, the culmination of a line of decisions now nearly twenty-five
years old, — a statement which a recent writer on the science of
jurisprudence has deemed so fundamental as to deserve quotation
and exposition at an unusual length as compared with his treatment
of other points,^ — let us compare the equally positive statement of
a sociologist: "Much of the discussion about 'equal rights' is
utterly hollow. All the ado made over the system of contract is
surcharged with fallacy."*
To everyone acquainted at first hand with actual industrial con-
ditions the latter statement goes without saying. Why, then, do
courts persist in the fallacy ? Why do so many of them force upon
^From Yale Law Journal, Vol. XVIII (1909), pp. 454-487.
^ Adair v. United States, 208 U.S. 161, 175.
'Taylor, Sdence of Jurisprudence, pp. 538-542.
*Ward, Applied Sociology, p. 281. See Wright, Practical Sociology, 5th ed.,
p. 226; Seager, Introduction to Economics, 3d ed., sects. 234 ff., "For one who
really understands the facts and forces involved, it is mere juggling with words
and empty legal phrases"; Ely, Economic Theory and Labor Legislation, p. 18.
579
S8o TRADE UNIONISM AND LABOR PROBLEMS
legislation an academic theory of equality in the face of practical
conditions of inequality ? Why do we find a great and learned court
in 1908 taking the long step into the past of dealing with the relation
between employer and employee in railway transportation as if the
parties were individuals — as if they were farmers haggling over the
sale of a horse ?^ Why is the legal conception of the relation of
employer and employee so at variance with the common knowledge
of mankind ? The late President has told us that it is because indi-
vidual judges project their personal, social, and economic views into
the law. A great German publicist holds that it is because the party
bent of judges has dictated decisions.^ But when a doctrine is
announced with equal vigor and held with equal tenacity by courts
of Pennsylvania and of Arkansas, of New York and of California, of
Illinois and of West Virginia, of Massachusetts and of Missouri, we
may not dispose of it so readily. Surely the sources of such a doc-
trine must lie deeper. Let us inquire, then, what further and more
potent causes may be discovered, how these causes have operated to
bring about the present state of the law as to freedom of contract,
what the present doctrine of the courts is upon that subject, and how
far we may expect amelioration thereof in the near future.
It is significant that the subject, so far as the form it now takes
is concerned, is a new one. The phrase "liberty of contract" is not
to be found in Lieber's " Civil Liberty and Self-Government," pub-
lished in 1853. It is not to be found in Professor Burgess's
"Political Science and Constitutional Law," published in 1890. The
first decision turning upon it was rendered in 1886.^ The first
extended discussion of the right of free contract as a fundamental
natural right is in Spencer's "Justice,"* written in 1891. The
eighteenth-century writers on natural law say nothing about it.
Fichte's discussion of the natural basis of civil law is silent with
respect to it.^ Even Bentham says that the function of government
is to create and confer upon individuals "rights of personal security,
rights of protection for honor, rights of property, rights of receiving
1 See Mr. Olney's paper, American Law Review, Vol. XLII, p. 164.
2 Jellinek, System der subjectiven offentlichen Rechte, p. 101, n. i.
^ Godcharles v. Wiseman, 113 Pa. St. 431.
* Spencer, Justice, chap. xv.
'The Science of Rights (translation), p. gj.
LIBERTY OF CONTRACT 581
aid in case of need."^ Ahrens (1837) argues not natural liberty of
contract but natural restraints on that liberty.^ Grotius, indeed, at
the very outset of the school of natural law, mentions liberty of con-
tract as a natural right.^ But his idea was not at all the one with
which we are concerned here. He was insisting not on the unre-
stricted right to make promises but on the natural force of promises
when made.* For the chief problem of the natural-law jurists was to
square the practical with the ideal, to test all things by reason and
to throw off empty forms. They warred against rules derived from
antiquity that enforced contracts rather than promises. They argued
that enforceability of promises should depend on a more reasonable
basis than form or than the traditional categories of Roman law.
Hence to Grotius, to Puffendorf,^ to Burlamaqui," the problem was
the source of the binding power of a promise.' To the eighteenth-
century jurist the all-important thing was that promises should be
kept. Montesquieu's description of the Troglodytes, who perished
utterly because they willfully violated contracts,* expresses their
feeling. That promises have in fact had to depend during the greater
part of legal history much more upon individual honesty than upon
positive law seemed to them at variance with the law of nature." We
see an echo of this discussion in the opinion of Chief Justice Marshall
in Sturges v. Crowninshield}"
The idea that unlimited freedom of making promises was a
natural right, came after enforcement of promises when made had
become a matter of course. It began as a doctrine of political econ-
omy, as a phase of Adam Smith's doctrine which we commonly call
^Theory of Legislation (Hildreth's translation), p. 95.
^Cours de droit naturel, Bk. II, sect. 83.
^De Jure Belli et Pacis, Bk. Ill, chap, xi, sect. 4.
^"And again, no reason can be found why laws, which are, as it were, a
common pact of the people, and are so called by Aristotle and Demosthenes,
should be able to give obligatory force to pacts, which the will of a person,
directed especially and by every means to obligating himself, may not do so,
especially where the civil law offers no impediment [i.e. to performance]" [ibid.
sect. 3).
'Law of Nature and Nations, Bk. Ill, chap. iv.
'Principles of Natural and Politic Law, Bk. II, Pt. IV, chap, x, sect. 4. See
also the end of chap, vii, in Bk. I, Pt. I.
'Ahrens, Cours de droit naturel, 8th ed., Bk. II, sect. 238.
^Lettres persanes, Lettre XIV et seq.
'Maine, Ancient Law, Pollock's ed., p. 325. ^"4 Wheaton 122, 197.
S82 TRADE UNIONISM AND LABOR PROBLEMS
laisser faired It was propounded as a utilitarian principle of politics
and legislation by Mill.^ Spencer deduced it from his formula of
justice. In this way it became a chief article in the creed of those
who sought to minimize the functions of the state that the most
important of its functions was to enforce by law the obligations
created by contract.^ But we must remember that the task, of the
English individualists was to abolish a body of antiquated institu-
tions that stood in the way of human progress. Freedom of con-
tract was the best instrument at hand for the purpose. They adopted
it as a means, and made it an end.* While this evolution of juristic
and political thought was in progress the common law too had be-
come thoroughly individualistic ; partly from innate tendency, partly
through theological influence, partly through the contests between the
courts and the crown in the sixteenth and seventeenth centuries, and
partly as a result of the course of thought in the eighteenth and nine-
teenth centuries. This bit of history may suggest the chief, although
not all, of the causes of the phenomenon we are considering.
In my opinion, the causes to which we must attribute the course
of American constitutional decisions upon liberty of contract are
seven : ( i ) the currency in juristic thought of an individualist con-
ception of justice which exaggerates the importance of property and
of contract, exaggerates private right at the expense of public right,
and is hostile to legislation, taking a minimum of lawmaking to be
the ideal ; ( 2 ) what I have ventured to call on another occasion a con-
dition of mechanical jurisprudence — a condition of juristic thought
and judicial action in which deduction from conceptions has pro-
duced a cloud of rules that obscures the principles from which they
were drawn, in which conceptions are developed logically at the
expense of practical results, and in which the artificiality charac-
teristic of legal reasoning is exaggerated ; (3) the survival of purely
1 Wealth of Nations, Bk. IV, chap ix (Thorold Rogers' ed., Vol. II, pp. 272-
273). Ricardo laid it down as a principle of political economy that legislation
should not interfere with contracts (Works, McCuUoch's ed., p. S7)- See a
discussion of the juristic bearmgs of these doctrines in Berolzheimer's "System
der Rechts- und Wirthschaftsphilosophie," Bk. II, sect. 32.
2 Liberty, chap. iv.
3 Ritchie, Natural Rights, p. 227.
*See Dicey, Law and Public Opinion in England, pp. 148-150; Sidgwick,
Elements of Politics, 2d ed., p. 83.
LIBERTY OF CONTRACT , 583
juristic notions of the state and of economics and politics as against
the social conceptions of the present ; (4) the training of judges and
lawyers in eighteenth-century philosophy of law and the pretended
contempt for philosophy in law that keeps the legal profession in
the bonds of the philosophy of the past because it is to be found in
law-sheep bindings; (5) the circumstance that natural law is the
theory of our bills of rights, and the impossibility of applying such
a theory except when all men are agreed in their moral and economic
views and look to a single authority to fix them; (6) the circum-
stance that our earlier labor legislation came before the public was
prepared for it, so that the courts largely voiced well-meant but
unadvised protests of the old order against the new, at a time when
the public at large was by no means committed to the new;^
and (7), by no means least, the sharp line between law and fact in
our legal system which requires constitutionality, as a legal question,
to be tried by artificial criteria of general application and prevents
effective judicial investigation or consideration of the situations of
fact behind or bearing upon the statutes.
Four stages may be observed in the development of the juristic
idea of justice. Understand me. I am not speaking of the ethical
conception nor of the political conception, closely as they are related
to and much as they may have determined the juristic idea. We
say that the end of law is the administration of justice. What do we
mean here by the term "justice"? What is it that courts and
jurists have sought to accomplish in the adjustment of human rela-
tions in public tribunals? The primitive idea was simply to keep
the peace. Justice, juristically, was a device to keep the peace.
Whatever served to avert private vengeance and prevent private
war was an instrument of justice. The Salic Law awarded twice the
compensation to the vigorous and half-civilized Frank that it did to
the effete and civilized Roman, because it required more to move the
Frank to restrain his anger and withhold his vengeance.^ But
Greek philosophy and Roman law soon got beyond this conception
and gave us in its place an idea of justice as a device to preserve the
social status quo, to keep each man in his appointed groove and thus
^Professor Seager has made a similar suggestion (Introduction to Economics,
3d ed., p. 417). ^SaHcLaw, tit. XIV.
S84 TRADE UNIONISM AND LABOR PROBLEMS
prevent friction with his fellows. Plato sets this out very clearly.^
In his ideal state "every member of the community must be assigned
to the class for which he proves himself best fitted. Thus a perfect
harmony and unity will characterize both the state and every person
in it."^ The Stoic doctrine of conformity to universal reason came
to much the same practical result.^ To Aristotle rights existed only
between those who were free and equal ;* justice demanded a unanim-
ity in which there would be no violation of mutual rights,^ and law
and right took "account in the first instance of relations of in-
equality, in which individuals are treated in proportion to their worth,
and only secondarily of relations of equality."" Roman legal genius
gave practical effect to this idea of justice by making it the province
of the state to define and protect interests and powers of action
which in the aggregate made up the legal personality of the indi-
vidual.' The precepts of law, as laid down in the Institutes, —
honeste vivere, alienum non laedere, suum cuique tribuere, — come
to this. As Courcelle-Seneuil has put it, the Roman ideal was a sta-
tionary society, corrected from time to time by a reversion to the
ancient type.* Roman natural law was simply an appeal to reason
against formaUsm. The natural law of the Middle Ages and of the
seventeenth century — an appeal to reason against authority — is a
very different thing.
Appeal to reason against authority led to a new conception in
philosophy, in theology, in politics, and ultimately in legal theory,
as a result of which justice came to be regarded as a device to
secure a maximum of individual self-assertion. The beginnings of
this are in philosophy. As Lord Acton put it, "Not the devil, but
St. Thomas Aquinas was the first Whig."^ Teutonic individualism,
^Republic, Bk. Ill, p. 424.
^Dunning, Political Theories, Ancient and Mediaeval, p. 28.
^Ibid. p. 105.
*Zeller, Aristotle and the Earlier Peripatetics (translated by Costelloe and
Muirhead), Vol. II, p. 175.
BEth. Nicomach. VIII, i, 24.
8 Zeller, op. cit. Vol. II, p. 197.
'This is well put in Willoughby, Political Theories of the Ancient World,
p. 64.
8 Preparation a I'etude du droit, pp. 99, 396. See Guyot, Principles of Social
Economy (Leppington's translation, 2d ed.), p. 299.
* Figgis, From Gerson to Grotius, p. 7.
LIBERTY OF CONTRACT 585
kept back by Roman authority in religion and law, 'broke over.
Puritan theology gave rise to ultraindividualism in church polity
and religion. The appeal to reason against the crown developed
political doctrines of civil liberty and natural rights of the individual.
And as Coke, the great light of our legal system, was in the fore-
front of the controversy with the crown and read all legal history in
the light of the exigencies of that controversy,^ the liberties of the
individual Englishman came to assume a central point in that sys-
tem that would have been taken by public good and the powers
of the state if Bacon rather than Coke had been the inspiration
of eighteenth-century commentators and nineteenth-century courts.
Moreover, our constitutional models and our bills of rights were
drawn in the period in which the natural-law school of jurists was
at its zenith, and the growing period of American law coincided with
the high tide of individualistic ethics and economics. Hence his
school course in political economy and his office reading of Black-
stone taught the nineteenth-century judge the same things as funda-
mentals.^ He became persuaded that they were the basis of the
jural order, and, as often happens, the individualist conception of
justice reached its complete logical development after the doctrine
itself had lost its vitality. Social justice, the last conception to
develop, had already begun to affect not merely legal thought but
^Compare his interpretation of Tregor's Case (Y. B.8E. 3, 30) and the case
in Fitzh. Abr. Cessavit, 42, in Bonham's Case, 8 Rep. 108a, ii8a, with the cases
themselves.
2 "Like all other contracts, wages should be left to the fair and free com-
petition of the market, and should never be controlled by the interference of
the legislature" (Ricardo, Principles of Political Economy, chap, v, sect. 7).
Chap, xi of Bk. V of MUl's " Political Economy," entitled " Of the Grounds and
Limits of the Laisser-faire or Non-interference Principle," was studied by every
liberally educated lawyer of the last fifty years. Mill {ibid. sect. 12) dis-
approves of, but at the same time suggests an argument in favor of, legislation
limiting the hours of labor. In Laughlin's edition (1884) the editor argues
against such legislation (p. 193). We are now prepared to read in the opinion
of O'Brien, J., in People v. Coler, 166 N. Y. i, that "A law that restricts the
freedom of contract on the part of both the master and servant cannot in the
end operate to the benefit of either" (p. 16). Also: "It was once a political
maxim that the government governs best which governs the least. It is possible
that we have now outgrown it, but it was an idea that was always present to
the minds of the men who framed the Constitution, and it is proper for the
courts to bear it in mind. when, expounding that instrument" (p. 14.)..
S86 TRADE UNIONISM AND LABOR PROBLEMS
legislation and judicial decision while the courts were working out
the last extreme deductions from the older conceptions.^
M. Worms, taking no account of the first stage above suggested,
has summed up the other three in these words : "To sum up, justice
has tried to organize society to the profit of force, later inde-
pendently of force, and it dreams today of organizing it against
force." ^ But our ideal of justice has been to let every force play
freely and exert itself completely, limited only by the necessity of
avoiding friction. As a result, and as a result of our legal history,
we exaggerate the importance of property, and of contract as an
incident thereof. A leader of the bar, opposing the income tax,
argues that a fundamental object of our polity is "preservation of
the rights of private property."^ Text writers tell us of the divine
origin of property.* The Supreme Court of Wisconsin tells us that
the right to take property by will is an absolute and inherent right,
not depending upon legislation.^ The absolute certainty which is
one of our legal ideals, an ideal responsible for much that is irritat-
ingly mechanical in our legal system, is demanded chiefly to protect
property.® And our courts regard the right to contract, not as a
phase of liberty — a sort of freedom of mental motion and locomo-
tion— but as a phase of property, to be protected as such.'' A
further result is to exaggerate private right at the expense of public
interest. Blackstone's proposition that " the public good is in nothing
more essentially interested than in the protection of every individual's
private rights'" has been quoted in more than one American
iSee my paper "The Need of a Sociological Jurisprudence," Green Bag,
Vol. XIX, p. 607.
2 Philosophie des sciences sociales, Vol. II, p. 222.
2 Argument of Mr. Choate in the Income Tax cases, 157 U.S. 429, 534.
* Smith, Personal Property, sect. 33. Berolzheimer sums up the characteristic
features of common-law legal speculation thus: "Unlimited high valuation
of individual freedom and respect for individual property"' (System der Rechts-
und Wirthschaftsphilosophie, II, 160).
^ Nunnemacher v. State, 108 N. W. 627.
8 See my paper "Enforcement of Law," Green Bag, Vol. XX, pp. 401, 408.
'Occasionally it is said to be "both a liberty and a property right" (Frorer
V. People, 141 111. 171, 181). Professor Seager suggests another reason for
American exaggeration of the importance of property (Introduction to Eco-
nomics, 3d ed., p. 21). He points out that this exaggeration has resulted in "an
industrial civilization which has been marked thus far by intense individualism
in thought and practice." Si Comm. p. 139,
LIBERTY OF CONTRACT 587
decision;^ and one of these is a case often cited in support of
extreme doctrines of liberty of contract.^ It is but a corollary
that liberty of contract cannot be restricted merely in the interest
of a contracting party. His right to contract freely is to yield only
to the safety, health, or moral welfare of the public.^ Still another
result is that bench and bar distrust and object to legislation. I have
discussed the history and the causes of this attitude toward legisla-
tion on another occasion.^ Suffice it to say here that the doctrine
as to liberty of contract is bound up in the decisions of our courts
with a narrow view of what constitutes special or class legislation
that greatly limits effective lawmaking. If we can have only laws
of wide generality of application, we can have only a few laws ; for
the wider their application, the more likelihood there is of injustice
in concrete cases. But from the individualist standpoint a minimum
of law is desirable. The common-law antipathy to legislation sympa-
thizes with this, and in consequence we find courts saying that it is
not necessary to consider the reasons that led up to the type of
legislation they condemn^ and that the maxim that the government
governs best which governs least is proper for courts to bear in
mind in expounding the Constitution."
The second cause, a condition of mechanical jurisprudence, I have
discussed in its relation to the legal system generally in another
place.' The effect of all system is apt to be petrifaction of the
subject systematized. Legal science is hot exempt from this tend-
ency. Legal systems have their periods in which system decays into
technicality, in which a scientific jurisprudence becomes a mechanical
jurisprudence. In a period of growth through juristic speculation
and judicial decision there is little danger of this. But whenever such
a period has come to an end, when its work has been done and its
^See, for example, Wynhamer v. People, 13 N. Y. 378, 387; Chase v. Bed, 31
Mich. 491.
2 Wynhamer v. People, supra.
^People V. Marcus, 128 N. Y. 257; In re House Bill 203, 21 Col. 27.
*" Common Law and Legislation," Harvard Law Review, Vol. XXI, p. 3S3.
^"For some reason, not necessary to consider, there has in modern times
arisen a sentiment favorable to paternalism in matters of legislation" {Lowe v.
Rees Printing Co., 41 Neb. 127, 13s). Cf. State v. Kreutzberg, 114" Wis. S30,
S37.
^People V. Coler, 166 N. Y. i, 14.
^"Mechanical Jurisprudence," Columbia Law Review, Vol. VIII, p. 60S.
588 TRADE UNIONISM AND LABOR PROBLEMS
legal theories have come to maturity, jurisprudence tends to decay.
Conceptions are fixed. The premises are no longer to be examined.
Everything is reduced to simple deduction from them. Principles
cease to have importance. The law becomes a body of rules. This
is the condition Professor Henderson refers to when he speaks of
the way of social progress as barred by barricades of dead prece-
dents.^ Manifestations of mechanical jurisprudence are conspicuous
in the decisions as to liberty of contract. A characteristic one is
the rigorous logical deduction from predetermined conceptions, in
disregard of and often in the teeth of the actual facts, which was
noted at the outset. Two courts, in passing on statutes abridging
the power of free contract, have noted the frequency of such legis-
lation in recent times but have said that it was not necessary to
consider the reasons for it.^ Another court has asked what right the
legislature has to ^'■assume that one class has the need of protection
against another."^ Another has said that the remedy for the
company-store evil "is in the hands of the employee," since he is
not compelled to buy from the employer,* forgetting that there may
be a compulsion in fact where there is none in law. Another says
that "theoretically there is among our citizens no inferior class," ^
and of course no facts can avail against that theory. Another tells
us that man and woman have the same rights, and hence a woman
must be allowed to contract to work as many hours a day as a man
may.^ We have already noted how Mr. Justice Harlan insists on a
legal theory of equality of rights in the latest pronouncement of the
federal Supreme Court. Legislation designed to give laborers some
measure of practical independence, which, if allowed to operate,
^American Journal of Sociology, Vol. XI, p. 847.
2 See cases in note $ on the preceding page.
^ State V. Haun, 61 Kan. 146, 162.
estate V. Fire Creek Coal & Coke Co., 33 W. Va. 188, 190. Those who have
studied the actual situation do not look at it in this way. "He is not free to
make such a contract as might please him because, like every party to a contract,
he must come to such conditions as can possibly be agreed upon. He is less
free than the parties to most contracts, and, further, he cannot utilize his labor
in many directions; he must contract for it within restricted lines" (Wright,
Practical Sociology, sth ed., p. 226).
^Frorer v. People, 141 111. 171, 186, holding against a statute prohibiting
company stores and requiring miners to be paid weekly.
'^Ritchie v. People, iJS lU- 99i m.
LIBERTY OF CONTRACT 589
would put them in a position of reasonable equality with their
masters, is said by courts, because it infringes on a theoretical
equality, to be insulting to their manhood^ and degrading,^ to put
them under guardianship,^ to create a class of statutory laborers,*
and to stamp them as imbeciles.'' I know of nothing akin to this
artificial reasoning in jurisprudence unless it be the explanation
given by Pomponius for the transfer of legislative power from the
Roman people during the Empire : " The plebs found, in course of
time, that it was difficult for them to meet together, and the general
body of the citizens no doubt found it more difficult still." ° No
doubt they did. Caesar or the praetorian prefect would have seen
to that.
Survival of a purely juristic notion of the state and of economics
and politics in contrast with the social conception of the present,
the third cause suggested, can be looked at but briefly. Formerly
the juristic attitude obtained in religion, in morals, and in politics
as well as in law. This fundamentally juristic conception of the
world — due possibly to Roman law being the first subject of
study in the universities, which gave a form of legality even to
theology — has passed away elsewhere. But it lingers in the courts.
Jurisprudence is the last in the march of the sciences away from
the method of deduction from predetermined conceptions. The socio-
logical movement in jurisprudence, the movement for pragmatism as
a philosophy of law, the movement for the adjustment of principles
and doctrines to the human conditions they are to govern rather than
^Godcharles v. Wigeman, 113 Pa. St. 431, 437 (wages in iron mills to be paid
in money).
^ State V. Goodwill, 33 W. Va. 179, 186 (store orders).
^Braceville Coal Co. v. People, 147 111. 66, 74 (coal to be weighed for iixing
wages) ; State v. Haun, 61 Kan. 146, 162 (wages to be paid in money).
* People V. Beck, 10 Misc. 77 (dissenting opinion of White, J.). The statute
fixed hours of labor on municipal contracts.
'^ State V. Goodwill, supra; Frorer v. People, 141 111. 171, 187 (company
stores) .
^Dig. I, 2, 2, sect. 9. Professor Seager says of these objections: "The op-
position to such regulations ... is based on the fear that they may serve to
undermine the spirit of independence of the protected persons. Experience
seems to indicate that they have in fact a directly contrary effect" (Introduction
to Economics, 3d ed., p. 421). See also p. 423 : "Those who advance it fail to
consider that deadening and monotonous toil too long continued is much more
inimical to the spirit of independence than any amount of legislation."
590 TRADE UNIONISM AND LABOR PROBLEMS
to assumed first principles, the movement for putting the human
factor in the central place and relegating logic to its true position
as an instrument, has scarcely shown itself as yet in America. Per-
haps the dissenting opinion of Mr. Justice Holmes in Lochner v. New
York'^ is the best exposition of it we have.
Another factor of no mean importance, in producing the line of
decisions we are considering is the training of lawyers and judges in
eighteenth-century theories of natural law. In a book just published
by a well-known writer on legal subjects, who has also been a
teacher of law, the whole basis of discussion is natural law. The
learned author does not indicate a suspicion that any doubt has
been cast upon or may attach to his philosophical premises.^ In an-
other book, published last year by a well-known practitioner, it is
recommended gravely that one subject of required study in prepara-
tion for the bar be " natural and civil law, and the principles, founda-
tion, and spirit of law," and the student is expected to learn these
from Grotius, Paley's "Moral and Political Philosophy," Burla-
maqui's "Natural Law," Puffendorf, and Macintosh's "Discourses
on the Study of the Law of Nature and Nations."* Until a com-
paratively recent date all legal education, whether in school or in
office, began with the study of Blackstone. Probably all serious
office study begins with Blackstone or some American imitator.
Many schools make Blackstone the first subject of instruction
today, and in others Blackstone is a subject of examination for
admission or of prescribed reading after admission, or there are
courses on elementary law in which texts reproducing the theories
of the introduction to and the first book of the " Commentaries " are
the basis of instruction. A student who is college trained may have
had a course or courses that brought him in contact with modem
thought. It is quite as likely he has not, or if he has, the natural-
law theories which are a matter of course in all our law books are not
unlikely to persuade him that what he learned in college is immaterial
in the domain of law.* Constitutional law is full of natural-law
1198 U.S. 4S, 75- But see also Holmes, "The Path of the Law," Harvard
Law Review, Vol. X, pp. 457, 467, 472.
-Schouler, Ideals of the Republic. 1808.
3 Dos Passes, The American Lawyer, p. 108. 1907.
*Cf. the review of Schouler's "Ideals of the Republic," Harvard Law Re-
view, Vol. XXII, p. 317.
LIBERTY OF CONTRACT 591
notions. For one thing, there is the doctrine that apart from consti-
tutional restrictions there are individual rights resting on a natural
basis, to which courts must give effect, "beyond the control of the
state." ^ In the judicial discussions of liberty of contract this idea
has been very prominent. The Supreme Court of Massachusetts,
in passing on legislation directed against fines in cotton mills, tells us
that a statute which violates "fundamental" rights "is unconstitu-
tional and void, even though the enactment of it is not expressly
forbidden."^ Another court reminds us that natural persons do not
derive their right to contract from the law.^ Another court, in
passing adversely upon legislation against company stores, says
any classification is arbitrary and unconstitutional unless it pro-
ceeds on "the natural capacity of persons to contract."^ Another,
in passing on a similar statute, denies that contractual capacity can
be restricted, except for physical or mental disabilities.^ Another
holds that the legislature cannot take notice of the de facto sub-
jection of one class of persons to another in making contracts of
employment in certain industries, but must be governed by the
theoretical, jural equality.^ These natural-law ideas are carried to
an extreme by the Supreme Court of Illinois in Ritchie v. People,''
in which case it is announced that women have a natural equality
with men and that no distinction may be drawn between them with
respect to power of engaging to labor.
Closely related to the ideas just considered, and, indeed, a product
of the same training, is a deep-seated conviction of the American
lawyer that the doctrines of the common law are part of the univer-
sal jural order. Just as, in nine cases out of ten, natural law meant
^Harlan, J., in Railway Co. v. Chicago, 206 U. S. 226, 237 (saying that com-
pensation for property taken for a public use is a " settled principle of universal
law reaching back of all constitutional provisions") ; Field, J., in Butchers'
Union etc. Co. v. Crescent City etc. Co., iii U.S. 746, 762 ("When such
[police] regulations do not conflict with any constitutional inhibition or natural
right, their validity cannot be successfully controverted") ; Miller, J., in Loan
Association v. Topeka, 20 Wall 655, 662 ; Marshall, C. J., in Fletcher v. Peck,
6 Cranch. 87 ; Iredell, J., in Colder v. Bull, 3 Dall. 386.
-Com. V. Perry, ijs Mass. 117 (1891).
^Leep V. Railway Co., 58 Ark. 407, 427.
*State v. Loomis, iij Mo. 307, 315.
^ State v. Fire Creek Coal & Coke Co., 33 W. Va. 188.
^State V. Haun, 61 Kan. 140, 162. ''155 111. 99.
592 TRADE UNIONISM AND LABOR PROBLEMS
for the seventeenth-century and eighteenth-century jurist the Roman
law which he knew and had studied, for the common-law lawyer
it means the common law.^ For one thing, this feeling leads to a
narrow attitude toward legislation — a tendency to hold down all
statutory innovations upon the common law as far as possible.^ In
like spirit, on this subject of liberty of contract, most of the courts
which have overthrown legislation as being in derogation of liberty
have insisted that only common-law incapacities can be given legal
recognition;^ that new incapacities in fact, growing out of new
conditions in business and industry, cannot be taken advantage of in
legislation ; that the ordinary farm hand and the laborer in the beet
fields, for example, must be treated alike. But, even more im-
portant for our purpose, this feeling operates in constitutional law to
lead judges to try statutes by the measure of common-law doctrines
rather than by the Constitution.*
iThe classical instance of this is Cutting's Case (Snow, Cases on Interna-
tional Law, p. 172). See also Marcy's confusion of the rules as to citizenship in
the several states of the United States with the rules of International Law as to
national character (Cockburn, Nationality, p. 118 et seq.).
2 See, for some examples of this, my paper "Common Law and Legislation,"
Harvard Law Review, Vol. XXI, p. 383. Another example is to be seen in the
judicial restrictions on the applications of Lord Campbell's Act (Z)e»i v. Pennsyl-
vania Co., 181 Pa. St. 527; Brannigan v. Union Min. Co., 93 Fed. 164; McMillan
V. Spider Lake etc. Co., 115 Wis. 332; Roberts v. Great Northern R. Co., 161
Fed. Rep. 239). The spirit of the courts in these cases is well illustrated by the
following remark of the Supreme Court of Pennsylvania : " We must remember
that the injury complained of is due to the negligence of a fellow workman, for
which the master is responsible neither in law nor morals" {Durkin v. Coal Co.,
171 Pa. St. 193, 202). Cf. Best, C. J., in Fairlee v. Herring, 3 Bing. 625, 630:
"I am happy to find in this case that which I find in most others, where
statutes have not interfered, that the common law will enable us to do justice."
^State V. Goodwill, 33 W. Va. 179; State v. Fire Creek Coal & Coke Co.,
33 W. Va. 188, 190; Frorer v. People, 141 111. 171, 186; State v. Loomis,
IIS Mo. 307, 315. In State v. Loomis the Court speaks of the common-law in-
capacities as "natural incapacities." But these cases all distinguish usury laws,
because such legislation has come to be part of our American common law.
*Cf. the attempt of the Supreme Court of Pennsylvania to read contributory
negligence into the Federal Safety Appliances Act (.Schlemmer v. Buffalo R. &
P. R. Co., 20s U. S. i). But the most remarkable example is to be seen in
Grossman v. Caminez, 79 App. Div. (N. Y.) ij, in which one of the judges,
regarding the Statute of Frauds as part of the legal order of nature, said of
a statute which required agents attempting to sell city lots to have written
authority : " It is a denial ... of a right or privilege, guaranteed to citizens,
to make verbal contracts which are to be performed within a year."
LIBERTY OF CONTRACT 593
Not only, however, is natural law the fundamental assumption of
our elementary books and of professional philosophy, but we must not
forget that it is the theory of our bills of rights. Not unnaturally,
therefore, courts have clung to it as being the orthodox theory of
our constitutions. But the fact that the framers held that theory
by no means demonstrates that they intended to impose the theory
upon us for all time. It is contrary to their principles to assume
that they intended to dictate philosophical or juristic beliefs and
opinions to those who were to come after them. What they did in-
tend was the practical securing of each individual against arbitrary
and capricious governmental acts. They intended to protect th^
people against their rulers, not against themselves. They laid down
principles, not rules, and rules can only be illustrations of those
principles so long as facts and opinions remain what they were when
the rules were announced. For instance: The cases agree that the
term "liberty" is broader than Coke's use of it; that the fact that
Coke confined it to freedom of physical motion and locomotion does
not exclude a broader interpretation today. Yet the same courts
that recognize that "liberty" must include more today than it did
as used in Coke's "Second Institute" lay it down that incapacities
are to remain what they were at common law ; that new incapacities
of fact, arising out of present industrial situations, may not be
recognized by legislation.^ This is, in truth, but another illustration
of the purely personal character of all natural-law theories.^
'^Frorer v. People, 141 111. 171, 181, 18S-187; Ritchie v. People, 155
m. 99, III; Harding v. People, 160 111. 4S9, 467; State v. Haun, 61 Kan.
146, 162. Cf. People V. Marx, 99 N.Y. 377.
2 See some illustrations in my paper "Common Law and Legislation," Har-
vard Law Review, Vol. XXI, pp. 383, 392-393. See also the statement of
Curtis, J., in Scott v. Sanjord, that "all writers" agree that slavery "is created
only by municipal law" (19 How. 393, 626). But Aristotle (Politics, Bk. I,
chap, v), Grotius (II, S, 27, sect. 2 and 29, sect. 2) and Rutherforth (Natural
Law, Bk. I, chap, xx, sect. 4), who are not insignificant authorities, argue that
slavery has a natural basis in some cases, beyond and apart from law. Again,
in Wynhamer v. People, 13 N.Y. 378, 434, Hubbard, J., said: "Liquor is not
a nuisance per se, nor can it be made so by a simple legislative declaration."
Since that time people have changed their minds, and we find another judge
saying: "The entire scheme of prohibition as embodied in the Constitution and
laws of Kansas might fail if the right of each citizen to manufacture intoxicat-
ing liquors for his own use or as a beverage were recognized. Such a right does
not inhere in citizenship" (Harlan, J., in Mugler v. Kansas, 123 U.S. 623).
594 TRADE UNIONISM AND LABOR PROBLEMS
Last of the causes suggested, but by no means the least efficient
in bringing about the line of decisions under consideration, is the
sharp line between law and fact in our legal system, due origi-
nally to the exigencies of trial by jury. The line between what is
for the court to pass upon and what is for the jury has come to be
called a line between law and fact. For purposes of jury trial the
line itself has to be drawn often very artificially. But, beyond that,
when it is drawn, the tendency is to assume that questions which
analytically are pure questions of fact, when they become questions
for the court to decide must be looked at in a different way from
ordinary questions of fact and must be dealt with in an academic
and artificial manner because they have become questions of law.
The tendency to insist upon such a line, and to draw it arbitrarily,
has spread from the law of trials to every part of the law. One
example is to be seen in decisions as to what is a reasonable time
in the law of negotiable instruments. Another may be seen in judi-
cial pronouncements as to negligence, which are leading so many of
our state legislatures to turn the whole matter over to juries in cases
of personal injury. Still another may be seen in the refinements
as to constructive fraud and badges of fraud, which led to wide-
spread legislation making fraud a question for the jury. It is one
of the chief factors in producing what I have ventured to call
mechanical jurisprudence in our legal system. In constitutional law
the necessity for drawing this line, and the assumption that what-
ever is left- to the court to decide must be dealt with artificially and
disposed of mechanically, operates to the disadvantage of new types
of legislation. It is felt that a law cannot be constitutional now if
it would have been unconstitutional one hundred years ago. In jact
it might have been an unreasonable deprivation of liberty as things
were even fifty years ago and yet be a reasonable regulation as
things are now. But the question is not one of fact. Being for the
court to decide, it must be decided upon some universal proposition,
valid in all places and at all times.^ Rate laws, in the investigation
1 Hence, when a court had to decide whether the common -law doctrine of
riparian rights was applicable to and hence in force in. a state where one part
was arid, so that the doctrine could not be applied, another part had abundant
rainfall, so that the doctrine was well suited thereto, and still another sometimes
had rain and sometimes not, it could not say the rule applies here and does not
LIBERTY OF CONTRACT 595
of which it may prove that a rate is confiscatory at one time and
not at another, are compelling courts to recognize that the constitu-
tionality of a statute may depend upon a pure question of fact, to
be investigated and determined as such. Hence they are likely to
induce a change of judicial attitude toward other legislation, the
reasonableness of which must depend upon questions of fact, which
only those who have investigated special industrial situations can
fairly determine. As it is, in the ordinary case involving constitu-
tionality the court has no machinery for getting at the facts. It
must decide on the basis of matters of general knowledge and on
accepted principles of uniform application. It cannot have the
advantage of legislative reference bureaus, of hearings before com-
mittees, of the testimony of specialists who have conducted detailed
investigations, as the legislature dan and does. The court is driven
to deal with the problem artificially or not at all, unless it is willing
to assume that the legislature did its duty and to keep its hands off
on that ground. More than anything else, ignorance of the actual
situations of fact for which legislation was provided and supposed
lack of legal warrant for knowing them have been responsible for
the judicial overthrowing of so much social legislation.
Turning now to the actual state of the decisions, let us look first
at the cases in which the idea of liberty of contract has been in-
voked to defeat legislation. The fountainhead of this line of decisions
seems to be the opinion of Mr. Justice Field in Butchers' Union Co.
V. Crescent City Co.^ in which he restates the views of the minority
in the Slaughter House Cases.'' This opinion has been one of the
staple citations in causes involving liberty of contract.^ In it he
took a vigorous stand against legislative interference with the
"right to follow lawful callings." Although it did not represent the
■vi&NS of the federal Supreme Court, this opinion had a far-reaching
apply there, depending on the facts, but had to insist upon one rule for the
whole state {Meng v. Coffey, 67 Neb. 500) .
^iii U.S. 746, 762.
2 16 Wall, 36.
^ Cited and relied on particularly in State v. Goodwill, 33 W. Va. 179, 183,
and through this case and the New York cases in nearly all the later decisions.
It is interesting to note that the Supreme Court of Illinois, at least, has fallen
into a settled practice of citing the opinion of the minority in the Slaughter
House Cases as if it were that of the Court.
S96 TRADE UNIONISM AND LABOR PROBLEMS
influence in the state Courts, It produced a reactionary line of deci-
sions in New York on liberty to pursue one's calling,^ and through
these eases its echoes are still ringing in the books. Mr. Justice
Field was eminently the man to lead this belated individualist cru-
sade. In him a Puritan ancestry and a Puritan bringing up^ were
followed by a professional career upon the frontier in the time and
at the place where the individual counted for more and the state-
imposed law for less than at any other period in our history. Thus
predisposed, his thorough study and minute knowledge of the
common-law authorities could not fail to make him a prophet of
common-law individualism. How zealously he performed his pro-
phetic calling the vogue today of his dissenting opinion of thirty-five
years ago, uttered to another generation and in view of a distinct
industrial situation, bears abundant witness. But the line of deci-
sions culminating in the Adair Case begins directly with a dictum of
the Supreme Court of Illinois, a court which has since attained a
bad eminence in this connection, to the effect that legislation pro-
viding how coal should be weighed in fixing the compensation of
miners was an undue interference with liberty of contract.' Two
years later two cases were decided upon the express point. The
pioneer, and, so far as influence upon the later decisions is concerned,
the leading case, is Godcharles v. Wigeman,^ in which, in an offhand
and positive pronouncement, without discussion or citation, the
Court declared that a statute requiring payment in money of wages
in iron mills was "degrading and insulting" to the laborer and
"subversive of his rights as a citizen." It said: "An attempt has
been made by the legislature to do what cannot be done ; that is,
prevent persons who are sui juris from making their own contracts."
In other words, it assumed that incapacities not known to the
common law could not be recognized by the legislature, and ignored
the palpable fact that courts of chancery had wielded a not incon-
siderable power of interference with freedom of contract. In the
^Matter of Jacobs, 98 N. Y. 98; People v. Marx, 99 N.Y. 377.
2 See H. M. Field, Life of David Dudley Field, chaps, i and ii.
^ Jones V. People, no 111. 590 (1884). Sheldon, J., said: "We do not regard
this as requiring that in all contracts for the mining of coal the wages of the
miners must be computed upon the basis of the weight of the coal mined. That
would be a quite arbitrary provision and seemingly an undue interference with
men's rights of making contracts." *ii3 Pa. St. 427 (1886).
LIBERTY OF CONTRACT S97
same year the Supreme Court of Illinois passed expressly upon the
subject of its dictum of two years before. The case of, Millet v.
People^ turned chiefly upon the point that the statute was restricted
to certain employers and was not applicable to employers generally.
But the Court (Scholfield, J.) said:
What is there in the condition or situation of the laborer in the
mine to disqualify him from contracting in regard to the price of
his labor or in regard to the mode of ascertaining the price? And
why should the owner of the mine not be allowed to contract in
respect to such matters as to which all other property owners and
agents may contract ?
The Court assumes that this question answers itself. It does not
conceive any examination necessary in order to ascertain whether
there is not in fact a difference. It does not consider that laborers
in mines may be in a continual condition of poverty, and that, as
Lord Northington put it, "Necessitous men are not, truly speaking,
free men, but, to answer a present exigency, will submit to any
"terms that the crafty may impose upon them."^
Godcharles v. Wigeman and Millet v. People soon obtained a con-
siderable following. They were cited three years later in State v.
Goodwill,^ holding unconstitutional a statute against payment of
wages in mines and factories in store orders, and State v. Fire Creek
Coal and Coke Co.^ deciding against legislation prohibiting mine
and factory owners from selling merchandise to their laborers at a
greater profit than when selling to others. The former case is es-
pecially interesting because of its argument that no new forms of
incapacity to contract can be recognized by the legislature. Speaking
of usury legislation, the Court says :
The right to regulate the rate of interest existed at the time the
Constitution was adopted, and cannot, therefore, be considered as
either an abridgment or restraint upon the rights of the citizen
guaranteed by the Constitution. The power to pass usury laws
exists by immemorial usage; but such is not the case with such
acts as we are now considering.
In the decade 1 890-1 899 the current of decisions following God-
charles v. Wigeman flowed fast. In 1890, in Ex Parte Kuback,^
1117 HI. 294. *33 W. Va. 188 (1889).
Wernon v. Bethell, 2 Eden, no, 113. =85 Cal. 274.
333 W. Va. 179 (1889).
598 TRADE UNIONISM AND LABOR PROBLEMS
the Supreme Court of California held adversely to a municipal ordi-
nance prescribing eight hours as a day's work on public works, on
the ground that it was an infringement of the right of persons "to
make and enforce their contracts." That the municipality might
have some right to dictate the terms of its own contracts seems not
to have been considered. The following year the Supreme Court of
Massachusetts held adversely to a statute prohibiting the imposition
of fines in cotton mills.^ The Court cited Godcharles v. Wigeman,
Millet V. People, and State v. Goodwill ; also the New York cases
as to the right to pursue one's calling. It said that the statute was
"an interference with the right to make reasonable and proper con-
tracts in conducting a legitimate business." But are the contracts
forbidden "reasonable and proper"? The legislature thought they
were not. To the Court the contrary seemed a matter of course.
It was assumed to be a matter of law. Viewed as one of fact, the
question assumes a very different aspect. It is interesting to observe
that Mr. Justice Holmes dissented. The Supreme Court of Illinois,
followed with three decisions. In Frorer v. People^ the statute was
directed against company stores and required employees to be paid
weekly. This was held invalid, citing the New York cases above
referred to, Godcharles v. Wigeman, the West Virginia cases. Ex
Parte Kuback, and Com. v. Perry. Its position is that the statute
interferes with the absolute right to make what contracts one chooses.
But the Court recognizes that usury laws also might be thought
to contravene this right, and it attempts to distinguish them thus:
Usury laws proceed upon the theory that the lender and the
borrower of money do not occupy toward each other the same rela-
tions of equality that parties do in contracting with each other in
regard to the loan or sale of other kinds of property, ahd that the
borrower's necessities deprive him of freedom in contracting and place
him at the mercy of the lender and such laws may be found on the
statute books of all civilized nations of the world, both ancient and
modern.
It does not seem to have occurred to Mr. Justice Scholfield that
the necessities of a miner or factory employee might impair his free-
dom of contract or put him at the mercy of his employers in the
^Com. V. Perry, iss Mass. 117 (1891).
2 141 111. 171 (1892).
LIBERTY OF CONTRACT 599
same way, nor that labor legislation was enacted or enacting in all
modern civilized countries, nor that England, which might be sup-
posed to be a modern civilized country, had abrogated her legislation
against usury .^
In Ramsey v. People'^ the same court had before it a statute
requiring mine operators to weigh coal on pit cars before it was
screened and to compute the pay of the miners on the basis of the
weight of the unscreened coal. In holding the law unconstitutional
the Court (per Bailey, J.) said :
[The statute] attempts to take from both employer and employee
engaged in the mining business, the right and the power of fixing by
contract the amount of wages the employee is to receive and the
mode in which such wages are to be ascertained.
That is, the Court considered the basis of computation of miners'
wages something that could only affect the miner and the operators
— something in which the public could have no reasonable concern.
How false this assumption was, and how much more sound was the
judgment of the legislature, experience soon made manifest. Ramsey
V. People was followed and relied upon three years later in In re
House Bill 203,^ in which the Supreme Court of Colorado advised
the legislature of that state that a bill providing for the weighing of
coal at the mine in order to fix the compensation of miners was not
in accord with the state nor with the federal constitution. As to the
latter proposition, we know now that the Court was in error.* But
the assumption that the public had no interest in the way in which
miners' wages were paid, which dictated the decision, was speedily
refuted by the ensuing wrangles, strikes, and disorders, due to at-
tempts to secure by force what could not be had by law. "Working
people have striven to obtain by strikes what they had failed to
secure by statute. The lawlessness which has disgraced Colorado,
like the lawlessness which has long disgraced Illinois, is traceable
ultimately to the denial of law by the authorities which alone can
constitute and establish it."°
I17 and 18 Vict. C. 90.
2142 ni. 380 (1892).
321 Col. 27 (189s)...
^McLean v. Arkansas, 29 Sup. Ct. Rep. 206.
sKelley, Some Ethical Gains through Legislation, p. 162. See also p. 144.
6oo TRADE UNIONISM AND LABOR PROBLEMS •
The third decision of the Supreme Court of Illinois referred to,
Braceville Coal Co. v. People^ involves the same questions and
reaches the same conclusion as in the Frorer case.
Legislation requiring payment in money of wages of employees in
mines and factories was held unconstitutional by the Supreme Court
of Missouri in State v. Loomis? The Court, as usual, cited the New
York cases, Godcharles v. Wigeman, and Millet v. People.: It in-
sisted chiefly, however, that the statute tried to create a new sort
of incapacity. Black, C. J., said: "This denial of the right to con-
tract is based upon a classification which is purely arbitrary, because
the ground of classification has no relation whatever to the natural
capacity of persons to contract."
What is "natural capacity to contract"? Have married women
natural capacity to contract ? The Supreme Court of Illinois seemed to
think so in Ritchie v. People.^ If so, there were some unconstitutional
restrictions upon their contractual powers at common law which have
by no means been removed entirely in all jurisdictions. If not, then
it would appear that natural capacity means simply common-law
capacity, and that the Court means to tell us that no incapacities not
recognized by the common law can be given effect to by legislation.
Legislation of the same sort came before the Supreme Court of
Arkansas the following year.* The Court upheld it, so far as con-
tracts with corporations were concerned, upon grounds that shall
be considered presently, but delivered a vigorous dictum to the effect
that it was invalid as to contracts of individuals with individuals.
This dictum was afterwards rejected and the legislation was upheld
for all purposes in a later decision.^ The year 1894 produced another
decision upholding liberty of contract in Low v. Rees Printing Co.,^
1147 III. 66 (1893).
2 IIS Mo. 307 (1893).
SjSS 111-99 (189s) ■
^Leep V. Railway Co., 58 Ark. 407 (1894).
^McLean v. State, 81 Ark. 304. The dictum in the former case repeated the
doctrine of the Illinois cases, the Court saying that a contract with respect to
wages between individual and individual "is necessarily harmless, of purely and
exclusively private concern, and cannot affect anyone except the parties." Since
the coal mmers' strike of 1901 courts have not been so sure of this.
«4i Neb. 127. A decision of an inferior court during 1894 may be noted
here. In Wheeling Bridge & Terminal Co. v. Gilmore, 8 Ohio Cir. Ct. 658,
the Court held adversely to a statute requiring extra compensation for all labor
over ten hours a day upon railroads.
LIBERTY OF CONTRACT 6oi
in which a general eight-hour law for all except farm laborers was
held unconstitutional.
In 189s we meet with three cases. The first of these, State v.
Julow,^ decided by the Supreme Court of Missouri, involved the
point passed upon in the Adair Case. The Court ruled adversely
upon a statute requiring employers not to prohibit their employees
from joining unions or compel them to withdraw from unions. The
second, decided by the Supreme Court of Colorado, has been spoken
of already. The third, a decision of the Supreme Court of lULoois,
probably establishes the high-water mark of academic individualism.
Ritchie v. People^ involved a statute regulating the hours of labor
of women employed in the manufacture of clothing. It was held
unconstitutional, first, because (the Court said) the legislature has
no right to deprive one class of persons of privileges allowed to other
persons under like conditions, and, second, because liberty of contract
is a property right and cannot be taken away. With respect to the
first of these propositions, one would think it might make some
difference what the respective classes were. Certainly legislation
does not allow women the same political privileges as other persons.
Moreover, one would think the question whether the conditions under
which women are employed in the manufacture of clothing are the
same as those under which ordinary contracts are made deserves
investigation. But to the Court the fact that the jural conditions
were the same was enough. On the second point the Court cites the
New York cases, Godcharles v. Wigeman, and the Goodwill, Frorer,
Perry, and Loomis cases. It says that consequences injurious to the
public health, welfare, and safety cannot flow from the manufacture
of clothing, and hence that such manufacture is not a subject of
regulation. But we may grant this and still suggest that the manner
of manufacture, by women and in sweatshops, for instance, may be
of grave public concern.^
1129 Mo. 163.
^iSSlll. 99.
3 In the opinion in this case, Magruder, J., says: "It will not be denied that
woman is entitled to the same rights under the Constitution to make contracts
with reference to her labor as are secured thereby to men " (p. 1 1 1 ) . It is worth
while to compare this with what the same court said as to usury legislation in
Frorer v. People, 141 111. 171, 186. In the latter case the Court said the legis-
lature could deprive necessitous debtors of their natural right to contract to
pay the highest rate of interest an avaricious creditor could extort from them,
602 TRADE UNIONISM AND LABOR PROBLEMS
The year 1896 produced two dicta in the same line. Harding v.
People^ involved a statute regulating the weighing ol coal for the
purpose of fixing miners' wages in all mines the product whereof was
shipped by rail or water. The Court held that the classification of
mines was unreasonable and the statute in violation of the provision
of the state constitution prohibiting special laws where general legis-
lation could be made to apply. But Mr. Justice Cartwright delivered
a very confident dictum that the statute could not be upheld for
the further reason that " it takes away the freedom of contracting by
the parties for the ascertainment of the weight of coal except by a
certain method" (p. 467). Possibly, in view of the recent decision
of the Supreme Court of the United States in McLean v. Arkansas,
the Court would not be so sure of this point today. In Shaver v.
Pennsylvania Co.' a Circuit Court of the United States had before
it a statute prohibiting railway employees from contracting away
their right to recover for injuries. The statute was held bad because
of unreasonable classification. But the Court was also of opinion
that it involved an unconstitutional interference with freedom of
contract.
Three cases were decided in accordance with the doctrine in ques-
tion in 1899. In Johnson v. Goodyear Mining Co? the Supreme
Court of California ruled adversely upon a statute requiring corpora-
tions to pay their laborers at least once a month the wages earned
during the preceding month. The Supreipe Court of Colorado, in
In re Morgan,^ had before it a statute regulating hours of employ-
ment in underground mines and in smelting and ore-reduction works.
The Court said that legislation which prohibited an adult man from
working or contracting to work more than eight hours a day in
any lawful private business which involved no injury to the general
public, on the ground that longer hours of labor would injure his
because usury laws existed when the Constitution was adopted. Looking at the
matter in this way, is it not pertinent to inquire whether married women could
have made any. contract when the Constitution was adopted ? If they could
not, would it follow that legislation could regulate the labor and wage contracts
of married women but not those of unmarried women, or would the faith of
the Court in its distinction be shaken ? It may be noted here conveniently that
there ig also in i8gs a decision of an inferior court of Pennsylvania following
Godcharles v. Wigeman {Com. v. Isenberg, 8 Kulp. 116).
I160III. 4S9. 3i27Cal. 4.
271 Fed. 931. *26Col. 415.
LIBERTY OF CONTRACT 603
health, was unconstitutional. It cited the views of the minority in
the Slaughter House Cases, as restated in the Butchers' Union Com-
pany Case, the New York cases, and the several cases on liberty of
contract already discussed, relying especially on Ritchie v. People.
In State v. Haun'^ the Supreme Court of Kansas held invalid a
statute requiring wages to be paid in money. The Court said :
While it might be desirable and profitable to the employee of such
corporation to receive a horse or a cow or a house and lot in payment
for his wages, yet the legislature prohibits payment in .that way and
places the laborer under guardianship, classifying him in respect of
freedom of contract with the idiot, the lunatic, or the felon in the
penitentiary.
That it is neither desirable nor profitable to the employee to re-
ceive wages in orders upon a company store was possibly irrelevant
to the purely academic view of such legislation. But surely the
Court might have said that the legislation classed the laborer in
mines with the sailor, over whose contracts courts of equity exer-
cise a jealous supervision, or a necessitous borrower, whom equity
will not suffer to clog his equity of redemption by any sort of
collateral provisions, however much his necessities and the exac-
tions of the lender may persuade him they are desirable or profit-
able. No one ever supposed that equity classed sailor or borrower
with idiots, lunatics, or felons.
The next year, 1900, the Supreme Court of Illinois had before it
a statute against prohibiting employees from joining or remaining
in unions. The Court, following the Julow case, held it an uncon-
stitutional interference with liberty of contract.^ Magruder, J., said
that the employer had a "right" to terminate the contract of em-
ployment for any reason he chose, subject to liability for damages
if his act was unwarranted. But damages are awarded as compensa-
tion for wrongs. How can we say that one must respond in damages
for the exercise of a sacred right, protected by the Constitution and
beyond the reach of legislation ? The Julow and Gillespie cases have
been followed in all the subsequent decisions.^
^61 Kan. 146.
^Gillespie v. People, 188 HI. 176.
^State V. Kreutzberg, 114 Wis. S30 (1902) ; Coffeyville Vitrified Brick & Tile
Co. V. Perry, 69 Kan. 297 (1904) ; People v. Marcus, 18S N. Y. 257 (1906).
6o4 TRADE UNIONISM AND LABOR PROBLEMS
After 1900 the pendulum had clearly begun to swing the other
way. But there are a number of striking decisions taking extreme
views as to liberty of contract prior to the Adair Case. The most
extreme is People v. Coler,^ in which the Court of Appeals of^ew
York passed adversely upon legislation with reference to hours of
labor and wages in municipal contracts. The opinion of O'Brien, J.,
in this case is a vigorous discussion of the economic and political
objections to labor legislation from the individualist standpoint, in-
sisting that such legislation is of no real benefit to the laborer and
is subversive of his natural rights. Perhaps the most interesting
point made in the opinion is a suggestion that the statute invades a
constitutional right of the contractor to make freely whatever con-
tract he can with the city. This overriding of the public interest in
municipal contracts in the interest of the private contractor with
the municipality goes beyond any other recorded judicial utter-
ance. It can be compared only with Blackstone's dictum that the
public good is in nothing more essentially interested than in the pro-
tection of every individual's private rights. In Mathews v. People^.
the statute, providing a state employment bureau, prescribed that
the bureau should not furnish a list of unemployed laborers to any
employer whose workmen were on a strike. This was held bad on
other grounds, but the Court (per Magruder, J.) declared that it
infringed the liberty of contract guaranteed by the Constitution.^
In State v. Varney Electrical Supply Co.^ the Coler case was followed
by the Supreme Court of Indiana. In State v. Missouri Tie & Tim-
ber Co? the Supreme Court of Missouri held that a statute requiring
employees to be paid in cash or negotiable instruments was an
unreasonable interference with the liberty of contract of adult em-
ployees. In Lochner v. New York " a bare majority of the Supreme
Court of the United States took the reactionary view, as it had
1166 N.Y. I (1901).
2202 111. 38g (1903).
3 Possibly more might be said for this statute than the Court assumed. In
view of the disorders and breaches of the peace which experience had shown
attend labor conflicts, it might be urged that the purpose of the proviso was
to preserve the pubUc peace. A provision that the state employment agency
should be used to provide ordinary employment, but not employment to break
strikes, has some arguable basis in reason when we look to the actual facts..
^160 Ind. 338 (1903).
= 181 Mo. 536 (1904). 6198 U.S. 4S (190S).
LIBERTY OF CONTRACT 605
fairly become by this time, of a statute prescribing the hours of
labor in bakeries. The view of the majority in this case, as usual,
goes back to the restatement in the Butchers' Union Company Case
of the views of the minority in the Slaughter House Cases. Mr. Jus-
tice Peckham cites his own definition of liberty in Allgeyer v. Louis-
iana,^ and that definition is admittedly based upon the views of Mr.
Justice Field and Mr. Justice Bradley in the cases referred to. In the
Allgeyer Case he had said :
The liberty mentioned in that amendment means not only the
right of the citizen to be free from the mere physical restraint of his
person, as by incarceration ; but the term is deemed to embrace the
right of the citizen to be free in the enjoyment of all his faculties ; to
be free to use them in all lawful ways ; to live and work where he
will ; to earn his livelihood by any lawful calling ; to pursue any
livelihood or avocation, and for that purpose to enter into all con-
tracts which may be proper, necessary and essential to his carrying
out to a successful conclusion the purposes above mentioned.
One may grant this definition and yet deny the consequence which
Mr. Justice Peckham derived from it in the Lochner case. His
position was, in effect, that a baker had a constitutional right to
contract to work as long as he pleased. He says (p. 57) :
There is no contention that bakers as a class are not equal in
intelligence and capacity to men in other trades or manual occupa-
tions, or that they are not able to assert their rights and care for
themselves without the protecting arm of the State interfering with
their independence of judgment and of action. They are in no sense
wards of the State. Viewed in the light of a purely labor law, with
no reference whatever to the question of health, we think that a law
like the one before us involves neither the safety, the morals nor the
welfare of the public, and that the interest of the public is not in the
slightest degree affected by such an act. The law must be upheld, if
at all, as a law pertaining to the health of the individual engaged
in the occupation of a baker. It does not affect any other portion of
the public than those who are engaged in that occupation. Clean and
wholesome bread does not depend upon whether the baker works but
ten hours per day or only sixty hours a week.
It will be seen that this opinion assumes two propositions of fact :
(i) that the public has no concern in how long a baker works, be-
cause the time he works has no effect on the product of his labor ;
116S U.S. S78.
6o6 TRADE UNIONISM AND LABOR PROBLEMS
(2) that there is nothing in the trade of baking, as carried on in
large cities, inimical to the health of those who are employed in it
for long hours at a stretch. Here again study of the facts has shown
that the legislature was right and the Court was wrong. Actual inves-
tigation has shown that the output of shops in which the only kind
of men who can be had to work for unreasonable hours under unsani-
tary conditions are employed is not at all what the public ought to
eat, and that long hours in shops of the sort are distinctly injurious
to health.^ But the decisive objection to the position of the majority
is put by Mr. Justice Holmes: in a few sentences that deserve to be-
come classical :
This case is decided upon an economic theory which a large part
of the country does not entertain. If it were a question whether I
agreed with that theory, I should desire to study it further and long
before making up my mind. But I do not conceive that to be my
duty, because I strongly believe that my agreement or disagreement
has nothing to do with the right of a majority to embody their
opinions in law. . . . The Fourteenth Amendment does not enact
Mr. Herbert Spencer's "Social Statics." . . . A constitution is not
intended to embody a particular economic theory, whether of pater-
nalism and the organic relation of the citizen to the State or of
laissez faire. It is made for people of fundamentally differing views,
and the accident of our finding certain opinions natural and familiar
or novel and even shocking ought not to conclude our judgment upon
the question whether statutes embodying them conflict with the
Constitution of the United States (pp. 75-76).
Finally, we have two cases — one in the Court of Appeals of New
York^ and the other, the Adair Case, in the Supreme Court of the
United States^ — in which the doctrine of the Julow case is adopted,
and legislation to prevent employers from prohibiting employees
from joining or requiring them to withdraw from labor unions is held
iC% Club Bulletin, Chicago, Vol. II, No. 25 (February 24, 1909). See also
the authorities cited in the dissenting opinion of Harlan, J., pp. 70-71. Sir
Frederick Pollock makes this very pertinent comment : " How can the Supreme
Court at Washington have conclusive judicial knowledge of the conditions affect-
ing bakeries in New York ? If it has not such knowledge as matter of fact, can
it be matter of law that no conditions can reasonably be supposed to ei&si
which would make such an enactment . . . constitutional ? {Law Quarterly
Review, Vol. XXI, p. 212).
^People V. Marcus 18S N. Y. 257 (1906).
3 208 U.S. 161 (1908).
LIBERTY OF CONTRACT 607
unconstitutional, as infringing liberty of contract. In the former
case the Court puts the matter thus :
The free and untrammeled right to contract is part of the liberty
guaranteed to every citizen by the federal and state constitutions.
Personal liberty is always subject to restraint when its exercise affects
the safety, health or moral and general welfare of the public, but
subject to such restraint an employer and employee may make and
enforce such contract relating to labor as they may agree on
(P:2SS)-
In other words, the public have no interest in bringing about a
real equality in labor bargainings, even though thereby strikes and
disorders may be obviated, and have no concern with contracts for
labor except where the safety, health, or morals of the public at large
may be concerned ! This is practically the position from which we
found the courts starting twenty years before.
Summing up the decisions which insist upon the inviolability of
freedom of contract, we find that the following propositions have been
decided: (i) Legislation forbidding employers from interfering
with the membership of their employees in labor unions is invalid.
All the courts have reached this conclusion. (2) Legislation prohibit-
ing the imposition of fines upon employees is invalid. Only one
court, however, has passed upon this subject. (3) Legislation pro-
viding for the mode of weighing coal in order to fix the compensation
of miners is held invalid in Illinois, Missouri, Colorado, and Kansas,
and in West Virginia where the parties are natural persons. But the
Supreme Court of the United States now holds to the contrary.
(4) Legislation against company stores, requiring employers to pay
wages in money, is held invalid in Pennsylvania, Illinois, Missouri,
Kansas, Colorado, and California, and in West Virginia as to con-
tracts with natural persons. But, as we shall see presently, many
states and the United States Supreme Court take the contrary
position on one ground or another. (5) Legislation as to the hours of
labor has been held bad (a) where labor of adult males is concerned
(unless very clearly of a dangerous or unhealthy character), in
Nebraska and by the United States Supreme Court; (6) where
labor of adult females is regulated, in Illinois — but most of the
state courts and the United States Supreme Court hold to the con-
trary; (c) where the hours of labor on public or municipal contracts
6o8 TRADE UNIONISM AND LABOR PROBLEMS
are regulated, in California, New York, and Indiana. But here,
again, many state courts and the federal Supreme Court are opposed.
(6) One court has also held that legislation cannot prohibit contracts
by railway employees for releasing their employers in advance from
liability for personal injuries. Federal legislation has probably de-
prived this question of all practical interest.
Some of the statutes passed upon in the foregoing cases may
have gone too far. Some of them involved bad or careless classi-
fications. Some of them ran counter to local constitutional pro-
visions, requiring general laws wherever possible. But one cannot
read the cases in detail without feeling that the great majority
of the decisions are simply wrong, not only in constitutional law
but from the standpoint of the common law, and even from that
of a sane individualism. Looking at them upon common-law prin-
ciples we must first of all recognize that there never has been at
common law any such freedom of contract as they postulate.
From the time that promises not under seal have been enforced at
all, equity' has interfered with contracts in the interests of weak,
necessitous, or unfortunate promisors. One of the earliest cases of
equitable interference was to prevent forfeitures to which promisors
had agreed solemnly under seal. Not only did equity grant to a
debtor a right of redemption for which he did not stipulate, but it
would not and will not let him contract it away in advance or
"clog" it by a collateral agreement that will operate to prevent a
redemption.^ In like manner equity interfered to set aside con-
tracts of sailors for the disposition of their wages or of prize money
due them where they appeared unfair, one-sided, or inequitable.-
It interfered also with contracts of heirs or reversioners in case of
inadequacy of consideration, on the theory that they were peculiarly
liable to be imposed on and subject to the danger of "sacrificing their
1 " A man will not be suffered in conscience to fetter himself with a limitation or
restriction of his right of redemption" (Lord Keeper Henley in Spurgeon v. Col-
lier, I Eden, 56, 59). "I take it to be an established rule that the mortgagee
can never provide at the time of making the loan for any event or condition on
which the equity of redemption shall be discharged and the conveyance abso-
lute" (Lord Northington in Vernon v. Bethell, 2 Eden, no, 113). See Rice v.
Noakes, 2 Ch. 44s (1900) ; Jarrah Timber etc. Corporation v. Samuel, 2 Ch. i
(1903).
^How V. Weldon, 2 Ves. Sr. 516, 518; Taylour v. Rochford, 2 Ves. Sr. 281.
Legislation in America has carried this even further.
LIBERTY OF CONTRACT 609
future interests in order to meet their present wants." ^ It refused
and refuses to grant specific performance of hard bargains, simply
because they are hard, leaving promisees to confessedly inadequate
and nugatory actions for damages. But there are no "natural
incapacities" here! Courts of equity have simply recognized the
facts of human intercourse, and have not suffered jural notions
of equality to blind them thereto. Again, Lord Holt laid it down
that the two sides of a bilateral contract were independent, because
if a promisor was foolish enough to make his promise independent
in form it was his own fault.^ But here too equity made an inroad
upon common-law individualism, and on equitable grounds condi-
tions are now said to be implied in law. It has been said that the
common law will not help a fool. But equity exists to help and
protect him. It is because there are fools to be defrauded and
imposed upon and unfortunates to meet with accidents and careless
people to make mistakes that we have courts of equity. Surely what
equity has done to abridge freedom of contract, legislation may
do likewise.
Moreover, usury laws, despite all that has been said to the
contrary, furnish a perfect analogy. I have spoken already of the
proposition that usury laws existed prior to our constitutions. A more
ingenious proposition was advanced by Mr. Justice Field in Munn v.
Illinois^ and is adopted by the Court in State v. Goodwill.^ He
said that originally no interest at all' could be taken ; that legisla-
tion created the right, and that usury laws were not a limitation of
an undoubted right but rather a bound put to a privilege the legisla-
ture had conceded. But the obvious answer to this is that enforcing
a promise not under seal is also a late, law-granted privilege. The
same historical argument that is relied on to dispose of the analogy
of usury overthrows the whole doctrine of freedom of contract. The
public interest in labor legislation today is much more real than its
interest in usury laws. But the two are of the same type.
Rightly considered, even individualist and natural-law principles
lead to the same conclusion. The authorities are agreed upon the
'^Earl of Chesterfield v. Janssen, 2 Ves. Sr. 125; McClure v. Raben, 125
Ind. 139.
"Thorpe v. Thorpe, 12 Mod. 455, 464.
= 94 U.S. 113. 433 W.Va.179,186.
6io TRADE UNIONISM AND LABOR PROBLEMSs
"natural" invalidity of a contract to become a slave.'^ But, as
Sidgwick points out, any "serious approximation to the condition
of slavery" comes to the same thing.^ Mill, much more liberal than
his followers, admits this, saying :
Not only persons are not held to engagements which violate the
rights of third parties, but it is sometimes considered a sufficient
reason for releasing them from an engagement that itjs injurious
to themselves.
Some of the writers on natural law had argued that there were
cases where natural law justified sale of oneself into slavery. To
this Mill says : " He therefore defeats, in his own case, the very
purpose which is the justification of allowing him to dispose of
himself."^
The principle of this applies to any situation where a person by
contract imposes substantial restraints upon his liberty. Freedom
to impose these restraints, in the hands of the weak and necessitous,
defeats the very end of liberty.* Liberty and equality in fact make
for a rational individualism. Academic individualism defeats itself.
Let us turn now to the other side, as represented in the decisions.
It is a saving characteristic of Anglo-American case law that deci-
sions upon an unsound principle are gradually surrounded by a mass
of exceptions, distinctions, and limitations which preclude extension
for the future and soon enable the current of judicial decision to
flow normally. Just as in the natural body foreign substances are
encysted and walled in and thus deprived of power for evil, the body
of our case law has the faculty of encysting and walling in rules and
doctrines at variance with a sound condition of the law. Such a
process has long been going on with respect to extreme doctrines of
liberty of contract. As a result we may now recognize six categories
of cases in which it has been laid down that labor legislation may
interfere with and infringe upon liberty of contract. The first of
these is the case of corporations. Under the power to amend the
i"The principle of freedom cannot require that he should be free not to
be free. It is not freedom to be allowed to alienate his freedom" (Spencer,
Justice, sect. 70) ; Mill, Liberty, chap. v.
2 Elements of Politics, 2d ed., p. 93.
^Liberty, chap. v.
*See a case in point in Dicey, Law and Public Opinion in England, pp. 264-
265.
LIBERTY OF CONTRACT 6ii
charters of corporations, which all states now reserve, it is held, that
the state may define the power of corporations to contract, and that
natural persons can have no claim of right to contract with these
creatures of the state beyond their powers. This doctrine, as applied
to labor legislation, originated in Maryland in 1880.^ It has been
followed in Rhode Island,^ West Virginia,^ Arkansas,* Tennessee,^
and the Supreme Court of the United States." It was adopted by an
appellate court in Kansas,'' but rejected by the Supreme Court.*
It has been rejected also in, California,® Illinois,^" and Missouri.^^
Second, it has been held that even if wages themselves may not be
regulated, the data from which to fix wages by any contract to be
entered into may be regulated in order to prevent fraud.^^ But the
decisions noted above as to weighing statutes are to the contrary.
Third, it is held that hours and conditions of labor in unhealthy
occupations, such as mining, work in smelters, and the like, may be
regulated.^^ But just how unhealthy the occupation must be so that
the court will know it to be such from its general information the
Lochner case leaves in doubt. Fourth, the overwhelming weight of
authority is to the effect that the legislature may regulate the hours
and conditions of labor of women and children.^* Here it is said there
are "natural" incapacities. But Illinois holds to the contrary as to
^Shager v. Mining Co., 55 Md. 74.
"State V. Brown & Sharpe Mfg. Co., 18 R.I. 16 (1893).
^ State v: Peel Splint Coal Co., 36 W. Va. 802 (1892).
^Leep V. Railway Co., 58 Ark. 507 (1894) ; Railway Company v. Paul, 64
Ark. 83 (1897).
^Dugger V. Insurance Co., gj Tenn. 245 (1895).
^Railway Company v. Paul, 173 U.S. 404 (1899). *
''State V. Haun, 7 Kan. App. 509.
^State V. Haun, 61 Kan. 146.
° Johnson v. Goodyear Mining Co., 127 Cal. 4.
^"Braceville Coal Co. v. People, 147 111. 66.
^^State V. Missouri Tie &■ Timber Co., 181 Mo. 336.
^"State V. Wilson, 61 Kan. 32 (1889) ; McLean v. Arkansas, 29 Sup. Ct.
Rep. 206 (1908).
^^Holden v. Hardy, 169 U. S. 366 (1898) ; In re Boyce, 27 Nev. 299 (1904) ;
Ex Parte Kair, 28 Nev. 127, 425 (1905).
^*Com. V. Hamilton Mfg. Co., 120 Mass. 383 (1876) ; Beyman v. Cleveland,
39 Ohio St. 651 (1884) ; State v. Buchanan, 29 Wash. 602 (1902) ; Wenham v.
State, 65 Neb. 394 (1902) ; State v. Muller, 48 Ore. 232 (igo6) ; State v. Shorey,
48 Ore. 396 (1906) ; Muller v. Oregon, 208 U. S. 412 ; Starnes v. Allison Mfg.
Co., 61 S. E. S2S (N. C. 1908).
6i2 TRAPE UNIONISM AND LABOR PROBLEMS
contracts of adult women.^ Fifth, it has been held to be within the
power of the state to prescribe the conditions upon which it will ■
permit public work to be done for itself or its municipalities, and
hence to regulate wages and hours on public contracts.^ But Cali-
fornia, New York, and Indiana, as has been seen, hold the contrary.
Finally, a number of cases have taken the sound position that the
mode of payment of laborers is a matter of public concern ; that it
is competent for the legislature to require that'^^'they be paid in
money or negotiable paper, and that it is competent to require that
they be paid promptly at stated intervals.^ Several of these cases
reject the distinction between corporations and natural persons in
this connection.^ But, what is worth more, a number clearly recognize
the actual facts of inequality as between employer and employee in
bargaining for labor in many sorts of employment.^ And in Hancock
V. Yaden Elliott, J., makes it clear from abundant examples that
limitations upon freedom of contract in the interest of individual
contracting parties have always existed. It is unfortunate that the
sweeping assertions of Godcharles v. Wigeman should have been
made the model for subsequent cases with this decision at hand
in the books.
What, then, is the hope for future labor legislation? On the
whole, one must say that it is bright. Not only do the cases last
noted afford many means for escape from the line of decisions first
considered but there are indications that the courts are ready to
seek such escape. The opinion of Mr. Justice Day in McLean v.
Arkansas especially is fraught with promise of a return on the
part of the federal Supreme Court to its sounder views prior to
^Ritchie v. People, 155 111. 99.
^V.S. V. Martin, 94 U.S. 400 (1876); State v. Atkin, 64 Kan. 7 (1901) ;
Atkin V. Kansas, 191 U. S. 207 (1903) ; In re Broad, 36 Wash. 449 (1904).
^Hancock v. Yaden, 121 Ind. 366 (1889) ; Opinion of the Justices, 163 Mass.
5S9 (189s) ; Harbison v. Knoxville Iron Co., 103 Tenn. 421 (1899) ; Dayton
Coal &■ Iron Co. v. Barton, J03 Tenn. 604 (1899) ; Knoxville Coal & Iron Co.
V. Harbison, 1S3 U.S. 13 (1901) ; International Text Book Co. v. Weissinger,
160 Ind. 349 (1902).
^Opinion of Justices, 163 Mass. 589; Harbison v. Knoxville Iron Co., 103
Tenn. 421.
s Notably International Text Book Co. v. Weissinger and McLean v.
Arkansas.
LIBERTY OF CONTRACT 613
the Lochner and Adair cases. Even the Court of Appeals of New
York has recently approved this significant remark :
Under a judicial system which has for centuries magnified the
sacredness of individual rights, there is much less danger of doing
injustice to the individual than there is in overlooking the obligations
of those in authority to organized society/
Possibly the decisions first considered, or some of them, were not
without good effect. Doubtless much of the earlier legislation was
crude and some of it was premature. But, on the other hand, those
decisions wrought an injury to the courts and to the public regard
for law, and for constitutional law in particular, far beyond any such
incidental good. An acute and well-informed observer said recently :
From my own experience I should say, perhaps, that the one
symptom among workingmen which most definitely indicates a class
feeling is a growing distrust of the integrity of the courts — the
belief that the present judge has been a corporation attorney, that
his sympathies and experience and his whole view of life is on the
corporation side.^
The attitude of many of our courts on the subject of liberty of
contract is so certain to be misapprehended, is so out of the range
of ordinary understanding, the decisions themselves are so academic
and so artificial in their reasoning, that they cannot fail to engen-
der such feelings. Thus those decisions do an injury beyond the
failure of a few acts. These acts can be replaced as legislatures
learn how to coriiply with the letter of the decisions and to evade
the spirit of them. But the lost respect for courts and law cannot
be replaced. The evil of those cases will live after them in impaired
authority of the courts long after the decisions themselves are
forgotten.
RoscoE Pound
Hasvaed Law School
^Wemer, J., in People v. Strollo, 191 N. Y. 42, 69.
2Jane Addams in American Journal of Sociology, Vol. XIII, p. 772.
T
XXXVIII
HOURS OF LABOR AND REALISM IN
CONSTITUTIONAL LAW
HE Massachusetts Supreme Court was called upon recently to
consider the constitutionality of the following statute:
Employees in and about steam railroad stations in this Common-
wealth designated as baggage men, laborers, crossing tenders, and the
like, shall not be employed for more than nine working hours in ten
hours' time ; the additional hour to be allowed as a lay off.
The increasing demand for shorter hours of labor throughout the in-
dustrial world, the likelihood that such demand will receive legisla-
tive recognition, the nation-wide importance of the attitude of the
judiciary toward such legislation ; conversely, the attitude of public
opinion upon the continued exercise by the courts of their traditional
power under the American constitutional system, — all these consid-
erations, and more, justify a constant critique within the profession
of the point of view, no less than the explicit factors, which control
judicial decisions upon social and industrial legislation.^
The question before the Massachusetts Supreme Court was not a
new question. Necessarily, therefore, the Court had to consider the
applicable precedents, and the legal thinking which was embodied
therein.^ What, then, was the legal background ? It will be serviceable,
'^From Harvard Law Review, Vol. XXIX (1916), pp. 353-373.
2 Valuable contributions have been made in recent years which will be re-
ferred to later, particularly the admirable papers of Professor Ernst Freund,
"Limitation of Hours of Labor and the Federal Supreme Court," Green Bag,
Vol. XVII, p. 411; Judge Learned Hand, "Due Process of Law and the Eight-
Hour Day," Harvard Law Review, Vol. XXI, p. 495; and Professor Roscoe
Pound, " Liberty of Contract," Yale Law Journal, Vol. XVIII, p. 454 (see above.
Chapter XXXVII).
3 This paper will concern itself wholly with the validity of the regulation of
hours of labor as a problem in what Mr. Justice Holmes calls the "apologetics
of the police power." Therefore objections to the specific statute under con-
sideration because (i) it fails to make provision for emergencies, (2) it is a
denial of the equal protection of the laws by reason of arbitrary classification,
614
HOURS OF LABOR 615
perhaps, briefly to summarize the state of the authorities deal-
ing with regulation of the hours of labor. Such a summary will
tell a useful tale of legal history ; it will do more — it may guide us
not a little in the solution of present-day constitutional problems.
For the purpose of legal analysis these cases fall into three groups :^
(i) regulation of the labor of women and children; (2) regulation
of labor in dangerous or peculiarly unhealthful employments ; and
(3) regulation of labor in industry generally.
I. REGULATION OF LABOR OF WOMEN AND CHILDREN
Commonwealth v. Hamilton Mfg. Co., 120 Mass. 383 (1876), sus-
tained a law prohibiting the labor of women and children for more
than sixty hours per week in manufacturing establishments. The
statute was sustained as a matter of course. No reference whatever
was made to the Fourteenth Amendment, and counsel was apparently
unable to "refer to any particular clause of the [Massachusetts]
Constitution to which this provision is repugnant" (p. 384).
Ritchie v. People, 155 111. 98 (1895),^ invalidated an eight-hour
law for women as ''a purely arbitrary restriction upon the funda-
mental right of the citizen to control his or her own time and
faculties" (p. 108).
Wenham v. State, 65 Neb. 394 (1902),^ sustained a sixty-hour-per-
week law for women on the ground that " women and children have
always, to a certain extent, been wards of the state," and that while
"the employer and the laborer are practically on an equal footing
. . . these observations do not apply to women and children"
(P-40S).
and (3) it interferes with a field taken over by Congress in the Hours of
Service Act of March 4, 1907, or special arguments in its favor, based (o) on
the power to amend corporate charters and (&) on the fact that a special
obligation may be imposed on public-service companies, are all put on one side.
^ Cases involving the validity of legislation as to hours of labor upon public
works or work done for the public are not considered. All recent important
authorities now sustain such legislation, not as an exercise of the police power
but as an assertion by the state of its right to regulate the conditions under
which public work shall be done. (Atkin v. United States, 191 U.S. 207 (1903) ;
People V. Crane, 214 N. Y. iS4, 108 N. E. 427 (1915), affirmed, 239 U.S. 195
(1915); Reim v. McCall, 214 N.Y. 629, 108 N. E. 109S (1915), affirmed, 239
U.S. 175 (191S).) 240 N.E. 4S4. 8gi N.w. 421.
6i6 TRADE UNIONISM AND LABOR PROBLEMS
State V. Buchanan, 29 Wash. 602 (1902)/ sustained a ten-hour
law for women in mechanical and mercantile establishments.
It is a matter of universal knowledge with all reasonably intelli-
gent people of the present age that continuous standing on the feet
by women for a great many consecutive hours is deleterious to their
health. . . . While the principles of justice are immutable, changing
conditions of society and the evolution of employment make a change
in the application of principles absolutely necessary to an intelligent
administration of government. In the early history of the law, when
employments were few and simple, the relative conditions of the
citizen and the state were different, and many employments and
uses which were then considered inalienable rights have since, from
the very necessity of changed conditions, been subjected to legislative
control, restriction, and restraint (p. 610).
People V. Williams, 189 N.Y. 131 (igoy),^ declared invalid a
statute prohibiting night work of women because "it is, certainly,
discriminative against female citizens, in denying to them equal rights
with men in the same pursuit" (p. 135).
Burcher v. People, 41 Col. 495 (1907),^ nullified an eight-hour
law for women and children because (i) under the Colorado Con-
stitution the legislature must specifically designate what pursuits are
unhealthful, and (2) even if the Court had power to pass on the
issue " the laundry business must be considered healthful ; for coun-
sel themselves, in their stipulation of facts, on which the record
shows the cause was decided, are in accord that such occupation is
healthful" (p. 504).
Muller V. Oregon, 208 U.S. 412 (1908), sustained the constitu-
tionality of a ten-hour law for women in any mechanical establish-
ment or factory or laundry.
The legislation and opinions referred to . . . may not be, techni-
cally speaking, authorities, and in them is little or no discussion of
the constitutional question presented to us for determination, yet
they are significant of a widespread belief that woman's physical
structure, and the functions she performs in consequence thereof
justify special legislation restricting or qualifying the conditions
under which she should be permitted to toil (p. 420).
The limitations which this statute places upon her contractual
powers, upon her right to agree with her employer as to the time she
shall labor, are not imposed solely for her benefit, but also largely for
the benefit of all (p. 422).
i7oPac.S2. =81 N.E. 778. ^93 Pac. 14.
HOURS OF LABOR 617
Ritchie & Co. v. Wayman, 244 111. 509 (1910),^ sustained a ten-
hour law for women in any mechanical establishment, factory, or
laundry. A heroic effort is made to distinguish the first Ritchie case
from the second Ritchie case. It is true that one was an eight-hour
law and .the other was a ten-hour law, but the two cases are, in
fact, irreconcilable in their underlying point of view.
Siurges v. Beauckamp, 231 U.S. 320 (1914), sustained the
Illinois Child Labor Law as an exercise " of the protective power of
government."
Riley v. Massachusetts, 232 U. S. 671 (1914), sustained a Massa-
chusetts fifty-four-hour-per-week statute.
Hawley v. Walker, 232 U. S. 718 (1914), sustained an Ohio nine-
hour statute.
Miller v. Wilson, 236 U.S. 373 (1915); Bosley v. McLaughlin,
236 U. S. 3S5. In these two able opinions by Mr. Justice Hughes
the United States Supreme Court sustained the extremest regulation
of hours of labor to date — California statutes limiting the labor of
women in certain pursuits to forty-eight hours per week.
It is manifestly impossible to say that the mere fact that the statute
of California provides for an eight-hour day, or a maximum of forty-
eight hours a week, instead of ten hours a day or fifty-four
hours a week, takes the case out of the domain of legislative
discretion. This is not to imply that a limitation of the hours of labor
of women might not be pushed to a wholly indefensible extreme, but
there is no ground for the conclusion here that the limit of the
reasonable exertion of protective authority has been overstepped
(p. 382).
People V. Schweinler Press, 214. N. Y. 395 (1915).^ The Court of
Appeals sustained a statute prohibiting night work for women and
with courageous frankness expressly overruled People v. Williams,
supra.
Impairment caused by exhaustion or even ordinary weariness must
be repaired by normal and refreshing sleep and rest if health and
efficiency are to be preserved (p. 401).
. . . surely it is a matter of vital importance to the state that the
health of thousands of women working in factories should be pro-
tected and safeguarded from any drain which can reasonably be
avoided. This is not only fori their own sakes but, as is and ought
191N. E. 69s. 2io8 N.E. 639.
6i8 TRADE UNIONISM AND LABOR PROBLEMS
to be constantly and legitimately emphasized, for the sake of the
children whom a great majority of them will be called on to bear
and who will almost inevitably display in their deficiencies the un-
fortunate inheritance conferred upon them by physically broken
down mothers (pp. 405-406).
II. REGULATION OF LABOR IN DANGEROUS EMPLOYMENTS
Holden v. Hardy, 169 U. S. 366 (1898)/ sustained a Utah statute
limiting to eight the hours of labor in underground mines. Familiar
as this case is, a few sentences from the powerful opinion of Justice
Brown will bear requoting:
The enactment does not profess to limit the hours of all workmen,
but merely those who are employed in underground mines, or in the
smelting, reduction, or refining of ores or metals. These employments,
when too long pursued, the legislature has judged to be detrimental
to the health of the employees, and, so long as there are reasonable
grounds for believing that this is so, its decision upon this subject
cannot be reviewed by the federal courts (p. 395).
The legislature has also recognized the fact, which the experience
of legislators in many states has corroborated, that the proprietors of
these establishments and their operatives do not stand upon an equal-
ity, and that their interests are, to a certain extent, conflicting. The
former naturally desire to obtain as much labor as possible from
their employees, while the latter are often induced by the fear of
discharge to conform to regulations which their judgment, fairly
exercised, would pronounce to be detrimental to their health or
strength. In other words, the proprietors lay down the rules and
the laborers are practically constrained to obey them. In such cases
self-interest is often an unsafe guide, and the legislature may properly
interpose its authority (p. 397).'
The question in each case is whether the legislature has adopted the
statute m exercise of a reasonable discretion, or whether its action be
a mere excuse for an unjust discrimination, or the oppression or
spoliation of a particular class (p. 398).
In re Morgan, 26 Col. 415 (1899).== The opinion of the United
States Supreme Court in Holden v. Hardy, supra, was not con-
vincing to the Supreme Court of Colorado, and with sturdy
lit is worth whUe to note that Mr. JusUce Brewer and Mr. JusUce Peckham
dissented. 258 p^^ ^^^^
HOURS OF LABOR 619
independence that court nullified a similar eight-hour law as to
underground mines.'^
The result of our deliberation, therefore, is that this act is an un-
warrantable interference with, and infringes, the right of both the em-
ployer and employee in making contracts relating to a purely private
business, in which no possible injury to the public can result (p. 450) .
Re Ten Hour Law for Street Railway Corporations, 24 R. I. 603
(1902),^ in an advisory opinion declared constitutional a ten-hour
statute for employees operating street railways.
Ex parte Boyce, 27 Nev. 299 (1904) ;^ followed in Ex parte Kair,
28 Nev. 127; ibid. 425 (1905);* and
State V. Cantwell, 179 Mo. 245 (1904),° sustained an eight-hour
law for underground mining work.
Baltimore & Ohio R. R. v. Interstate Commerce Commission, 221
U.S. 612 (1911), sustained the constitutionality of the Hours of
Service Act of March 4, 1907.
The fundamental question here is whether a restriction upon the
hours of labor of employees who are connected with the movement of
trains in interstate transportation is comprehended within this sphere
of authorized legislation. This question admits of but one answer.
The length of hours of service has direct relation to the efficiency of
the human agencies upon which protection to life and property neces-
sarily depends. This has been repeatedly emphasized in official reports
of the Interstate Commerce Commission, and is a matter so plain as to
require no elaboration. In its power suitably to provide for the safety
of employees and travelers. Congress was not limited to the enactment
of laws relating to mechanical appliances, but it was also competent
to consider, and to endeavor to reduce, the dangers incident to the
strain of excessive hours of duty on the part of engineers, conductors,
train dispatchers, telegraphers, and other persons embraced within
the class defined by the act. And in imposing restrictions having
reasonable relation to this end there is no interference with liberty
of contract as guaranteed by the Constitution (pp. 618-619).
^To avoid the grotesque clash between state fourts and the Supreme Court
as to the scope of constitutional protection of the same fundamental rights, a
recommendation to leave the protection of such rights entirely to the Fourteenth
Amendment, and therefore omit the corresponding provisions of the Bill of
Rights in our state constitutions, has received the support of distinguished
members of the profession and of statesmen like ex-President Taft and ex-
Attomey-General Wickersham.
254 Atl. 602. *8o Pac. 463; 82 id. 4S3.
«7S Pac. I. BysS.W. S69.
i20 TRADE UNIONISM AND LABOR PROBLEMS
III. REGULATION OF HOURS OF LABOR IN GENERAL
Low V. Rees Printing Co., 41 Neb. 127 (1894)/ declared uncon-
titutional an eight-hour day for mechanics and laborers, both
lecause it was class legislation and violative of liberty of contract,
ifter naively regarding it as irrelevant to consider the impulse back
if such legislation^ the Court nullified the statute as an attempt
ly the legislature to "prohibit harmless acts which do not concern
he health, safety, and welfare of society" (p. 147)-
Lochner v. New York, 198 U.S. 45 (1905). In this well-known
ase the Supreme Court invalidated a ten-hour law for bakers,
peaking for the five majority judges, Mr. Justice Peckham declared
hat "to the common understanding the trade of a baker has never
leen regarded as an unhealthy one" (p. 59), and therefore "the act
3 not, within any fair meaning of the term, a health law, but is an
[legal interference with the rights of individuals, both employers and
mployees, to make contracts regarding labor upon such terms as
hey may think best, or which they may agree upon with the other
larties to such contracts. Statutes of the nature of that under re-
iew, limiting the hours in which grown and intelligent men may
ibor to earn their living, are mere mleddlesome interferences with the
ights of the individual. . . ." (p. 61).
The vigorous dissenting opinions of Harlan, White, Day, and
lolmes, JJ., are familiar. But the following, from the opinion of
dr. Justice Holmes, pithily and completely puts the other point of
■ieW in the clash of ideas then before the Court :
I think that the word liberty in the Fourteenth Amendment isper-
erted when it is held to prevent the natural outcome of a dominant
pinion, unless it can be said that a rational and fair man neces-
arily would admit that the statute proposed would infringe funda-
lental principles as they have been understood by the traditions of
ur people and our law. It does not need research to show that no
uch sweeping condemnation can be passed upon the statute before
IS. A reasonable man might think it a proper measure on the score
f health. Men whom I certainly could not pronounce unreasonable
159 N.W. 362.
2 "For some reason, not necessary to consider, there has in modern times
risen a sentiment favorable to paternalism in matters of legislation" (p. 135,
;alics ours).
HOURS OF LABOR 621
would uphold it as a first installment of a general regulation of the
hours of work (p. 76).^
State V. Mikskek, 225 Mo. 561 (1909),^ invalidated a six-days act
— rest one day in seven — for bakers as an arbitrary infringement
of liberty of contract.
State V. Lumber Co., 102 Miss. 802 (1912),^ sustained a ten-hour
law for labor employed in manufacturing. The Court decided that
the Lochner case did not control on the facts, and, significantly, relied
on the dissenting opinions in that case for the statement of the
governing principles.
It would not be unreasonable for the legislature to decide that it
would promote the health, peace, morals, and general welfare of all
laborers engaged in the work of manufacturing or repairing if they
were not permitted to extend their labor over ten hours a day, and the
legislature could also decide that the best interests of the people in
the state would be 'promoted by limiting the time of work of this
numerous class of its citizenry to the time mentioned. In fact, when
we consider the present manner of laboring, the use of machinery,
the appliances, requiring intelligence and skill, and the general
present-day manner of life, which tends to nervousness, it seems to
us quite reasonable, and in no way improper, to pass such law so
limiting a day's labor (p. 834).
On rehearing the decision was affirmed,* the Court taking occasion
to comment upon "the notable fact that it is rare for the seller of
labor to appeal to the courts for the preservation of his inalienable
rights to labor. This inestimable privilege is generally the object
of the buyer's disinterested solicitude. Some day, perhaps, the in-
alienable right to rest will be the subject of litigation . . ."= (103
Miss. 267-268).
^See the elaboration and application of this last thought in Mr. Justice
Holmes's dissenting opinions in Adair v. United States, 208 U.S. 161, 190
(1908), and Coppage v. Kansas, 236 U.S. i, 26-27 (1915).
2i2S S.W. 507.
359 So. 923.
*State V. Lumber Co., 103 Miss. 263, 60 So. 215 (1913).
5 See a similar observation in Holden v. Hardy, 169 U.S. 369, 397, supra:
" It may not be improper to suggest in this connection that although the prose-
cution in this case was against the employer of labor, ... his defense is not so
much that his right to contract has been infringed upon, but that the act works
a peculiar hardship to his employees, whose right to labor as long as they please
is alleged to be thereby violated. The argument would certainly come with
better grace and greater cogency from the latter class."
)22 TRADE UNIONISM AND LABOR PROBLEMS
State V. Barba, 132 La. 768 (1913)/ held unconstitutional an
;ight-hour law for stationary firemen, both because it constituted
in arbitrary classification and impaired the liberty of contract.
State V. Bunting, 71 Ore. 259 (1914)/ sustained a ten-hour law
or labor in factories. In this case the Court again found the dis-
lenting opinions of the Lochner case rather than the decision on
he facts of that case the relevant authority.
A certain minimum of physical well-being is necessary in order
hat social life may exist, the usefulness and intelligence of the citi-
;ens be increased, and the progress of civilization accelerated
Freund, "Police Power," sects. 8, 10). . . . The required minimum
)f well-being varies in different periods, but rises with advancing
ivilization until it includes a certain standard of comfort. ... It is
in undeniable fact that prolonged and excessive physical labor is per-
ormed at the expense of the mental powers, and it requires no argu-
nent to show that a man who day in and day out labors more
han ten hours must not only deteriorate physically, but men-
ally. ... In view of the well-known fact that the custom in our
ndustries does not sanction a longer service than ten hours per day,
t cannot be held, as a matter of law, that the legislative require-
nent is unreasonable or arbitrary as to hours of labor. ... It is
irged . . . that if it is possible for the legislature to make the dec-
aration that to work in a factory more than ten hours in one day is
njurious to the health, then that body can make four hours a day's
vork, and require two hours of the work to be performed before
light o'clock A.M. It is sufficient to say that the question of four
lours' constituting a day's labor, or when any part of it shall be done,
s not now before this Court (pp. 267, 272, 273).
People v. Klinck Packing Co., 214 N. Y. 121 (1915).' "The right
o rest," — or rather the need for leisure, — to which the Supreme
[^ourt of Mississippi adverted in 19 12, quickly received authoritative
ecognition from the New York Court of Appeals. In this case there
ras sustained a statute requiring one day of rest in seven. The proper
phere of legislative discretion and a correspondingly limited scope of
udicial review are put most excellently by Judge Hiscock :
Our only inquiry must be . . . whether it can fairly be believed
hat its [the statute's] natural consequences will be in the direction
if betterment of public health and welfare, and, therefore, that it is
I61 So. 784.
^Appeal now pending before the Supreme Court of the United States.
Si 08 N. E. 278.
HOURS OF LABOR 623
one which the state for its protection and advantage may enact and
enforce. It seems to me very clear that we may answer that it is
such an one. ... A constantly increasing study of industrial con-
ditions I believe leads to the conviction that the health, happiness,
intelligence and efficiency even of an adult man laboring in such
employments [factory and mercantile] as those mentioned in this
statute will be increased by a reasonable opportunity for rest, for
outdoor life and recreation, for attention to his own affairs, and, if
he will, study and education.
Then we come to the question, what is a reasonable opportunity,
and within wide limits that problem is for the legislature. Anybody
would probably say that one day in thirty or sixty would be too
Uttle and one day in each two days extravagant. Between these
extremes none can safely assert that the mean adopted by the
legislature of one day in seven is unreasonable (pp. 127-128),^
A study of these opinions indicates a change not only in the de-
cisions but in the groundwork of the decisions. We find a shift in
the point of emphasis, a modification of the factors that seem
relevant, a different statement of the issues involved, and a difference
in the technic by which they are to be solved. The turning point
comes in 1908 with Midler v. Oregon? While lone voices of wisdom
had been heard for almost two decades,^ and the tendency was clearly
in its direction, yet this case marks the culmination.
Prior to 1908 the decisions disclose certain marked common
characteristics :
I. Despite disavowal that the policy of legislation is not the courts'
concern, there is an unmistakable dread of the class of legislation
under discussion.* Intense feeling against the policy of the legislation
must inevitably have influenced the result in the decisions. In truth
^ Since the decision of the Massachusetts case under discussion the Supreme
Court of Louisiana has again declared unconstitutional an eight-hour law for
stationary firemen, partly as unfair classification (because applying only to
cities over 50,000) and partly as an; impairment of liberty of contract (77 So.
(La.) 70 (191S)).
2 208 U. S. 412, supra.
'See the dissenting opinion of Mr. Justice Holmes in Commonwealth v.
Perry, 155 Mass. 117, 123 (1891); Thayer, Legal ' Essays, i; Green Bag, Vol.
XXVI, pp. sii, 514-
*"The tendency of legislatures, in the form of regulatory measures, to inter-
fere with the lawful pursuits of citizens is becoming a marked one in this coun-
try, and it behooves the courts, firmly and fearlessly, to interpose the barriers
of their judgments when invoked to protest against legislative acts plainly
624 TRADE UNIONISM AND LABOR PROBLEMS
this presents the point of greatest stress in our constitutional system,
for it requires minds of unusual intellectual disinterestedness, detach-
ment, and imagination to escape from the too easy tendency to find
lack of power where one is convinced of lack of wisdom.
2. Legislation is sustained as part of the prevailing philosophy of
individualism, as an exceptional protection to certain individuals
as such, and not as a recognition of a general social interest. Thus
legislation is supported either because women and children are wards
of the state, are not sui juris, or to relieve certain needy individuals
in the community from coercion.^ The underlying assumption was,
of course, that industry presented only contract relations between
individuals. That industry is part of society, the relation of busi-
ness to the community, was naturally enough lost sight of in the
days of pioneer development and free land.^
3. The courts here deal with statutes seeking to affect in a very
concrete fashion the sternest actualities of modern life : the conduct
of industry and the labor of human beings therein engaged. Yet the
cases are decided, in the main, on abstract issues, on tenacious
theories of economic and political philosophy. There is lack of
scientific method either in sustaining or attacking legislation. Legis-
lation is sustained or attacked on vague humanitarianism, on pressure
of immediate suffering, or " common understanding." This is not the
fault of the courts. It was characteristic of our legislative processes,
as well as of the judicial proceedings which called them into question.
It was true, substantially, of the social legislation of the nineteenth
century.^
The courts decided these issues on a priori theories, on abstract
assumptions, because scientific data were not available or at least
transcending the powers conferred by the Constitution upon the legislative
body" (People v. Williams, 189 N. Y. 131, 135, 81 N. E 778, 780 (1907)).
"This interference on the part of the legislatures of the several states with
the ordinary trades and occupations of the people seems to be on the increase"
(Lochner v. New York, 198 U.S. 45, 63 (1905)).
^Holden v. Hardy, 169 U.S. 366, 397, supra.
2 See the stimulating papef, "Labor, Capital and Business at Common Law,"
by Edward A. Adler, Harvard Law Review, Vol. XXIX, p. 241, particularly
pp. 262-274.
SThe earliest Factory Act was the "work of benevolent Tories" (Dicey,
Law and Opmion in England, 2d ed., p. no, and Lecture VII, particularly pp 220
et seq., 228, 229; Goldmark, Fatigue and Efficiency, chap. i).
HOURS OF LABOR 625
had not been made available for the use of courts. But all this time
scientific data had been accumulating. Organized observation, in-
vestigation, and experimentation produced facts, and science could
at last speak with rational if tentative authority. There was a grow-
ing body of the world's experience and the validated opinions of those
competent to have opinions. Instead of depending on a priori con-
troversies raging around jejune catchwords like "individualism" and
"collectivism," it became increasingly demonstrable what the effect
of modern industry on human beings was and what the reasonable
likelihood to society of the effects of fixing certain minimum standards
of life.
The Muller case, in 1908, was the first case presented to our courts
on the basis of authoritative data. For the first time the arguments
and briefs breathed the air of reality. The response of the Court on
this method of presenting the case is significant.
In patent cases counsel are apt to open the argument with a dis-
cussion of the state of the art. It may not be amiss, in the present
case, before examining the constitutional question, to notice the
course of legislation as well as expressions of opinion from other than
judicial sources. In the brief filed by Mr. Louis D. Brandeis, for
the defendant in error, is a very copious collection of all these
matters. . . }
'^Muller V. Oregon, 208 U. S. 412, 419 (1907), The great mass of data con-
tained in the brief is epitomized in the margin of the Court's opinion. Miss
Josephine Goldraark, Publication Secretary of National Consumers' League,
collaborated with Mr. Brandeis in the preparation of this and subsequent briefs,
which are now available in Part II of Miss Goldmark's book "Fatigue and
Efficiency."
The present-day demand for scientific ascertainment of facts for legislation
and administration is strikingly illustrated by Miss Lathrop in her Third Annual
Report as Chief of the United States Children's Bureau (191S). "The whole
field of child labor is thus far singularly barren of scientific study. . . . Full
and intelligent protection of the physique and mental powers of the youthful
workers in this country requires costly and laborious studies in laboratory and
jn workshop. . . . The Children's Bureau now desires to call attention to these
studies and to submit the reasonableness of spending money to make them. It
proposes a later presentation of carefully considered plans for which certain
preparatory studies are now going forward. The more rapidly the restrictive
child-labor legislation becomes uniform, the more evident must be the need of
studying the welfare of the young worker within the occupation, so that we
may secure just standards for the use of labor, as new standards for material
are bemg developed" (pp. 23, 24).
!6 TRADE UNIONISM AND LABOR PROBLEMS
The legislation and opinions referred to in the margin may not be,
chnically speaking, authorities, and in them is little or no discussion
the constitutional question presented to us for determination, yet
ey are significant of a widespread belief that woman's physical
ructure, and the functions she performs in consequence thereof,
stify special legislation restricting or qualifying the conditions
ider which she should be permitted to toil. Constitutional ques-
)ns, it is true, are not settled by even a consensus of present public
linion, for it is the peculiar value of a written constitution tiiat it
aces in unchanging form limitations upon legislative action, and
us gives a permanence and stability to popular government which
herwise would be lacking. At the same time, when a question of
ct is debated and debatable, and the extent to which a special con-
tutional limitation goes is affected by the truth in respect to that
zt, a widespread and long-continued belief concerning it is worthy
consideration^ (italics ours).
That upon such showing the Supreme Court should sustain the
ntested statute was inevitable. But the Muller case is "epoch-
iking" not because of its decision but because of the authoritative
:ognition by the Supreme Court that the way in which Mr. Brandeis
esented the case — the support of legislation by an array of facts
lich established the reasonableness of the legislative action, bow-
er it may be with its wisdom^ — laid down a new technic for coun-
1 charged with the responsibility of arguing such constitutional
lestions, and an obligation upon courts to insist upon such method
argument before deciding the issue, surely, at least, before deciding
e issue adversely to the legislature. For there can be no denial
at the technic of the brief in the Muller case has established itself
rough a series of decisions within the last few years, which have
used not only change in decisions but the much more vital change
method of approach to constitutional questions.^
The most striking illustration is the attitude of the New York
lurt of Appeals in People v. Schweinler Press? In that case, it will be
^Muller V. Oregon, 208 U. S. 420-421.
2 See briefs in Ritchie & Co. v. Wayman, 244 HI. sag, 91 N. E. 695 (1910) ;
mley v. Walker, 232 U. S. 718 (1914) ; Miller v. Wilson, 236 U. S. 373 (1915) ;
>sley V. McLaughlin, 236 U.S. 38s (1915); Stettler v. O'Hara, 69 Ore. 519,
9 Pac. 743 (1914) (and brief in the same case now pending before the Su-
ime Court of the United States) ; People v. Schweinler Press, 214 N.Y •595,
5 N.E. 639(1915).
8214 N.Y. 395,. 108 N.E. 639 (191S).
HOURS OF LABOR 627
recalled, the Court courageously overruled People v. WUUams, supra,^
and sustained a statute prohibiting night work for women. We find
a careful ascertainment of facts by the legislature as the basis of its
action, and thereafter a careful presentation of facts before the Court
to support the legislative reason. Not only was there a presentation
of facts in 1915 such as counsel failed to make in 1907 but there
was a presentation of new facts acquired since 1907. If the point of
view laid down in this case be sedulously observed in the argument
and disposition of constitutional cases, it is safe to say that no statute
which has any claim to life will be stricken down by the courts.
While theoretically we may have been able to take judicial notice
of some of the facts and of some of the legislation now called
to oiu- attention as sustaining the belief and opinion that night work
in factories is widely and substantially injurious to the health of
women, actually very few of these facts were called to our attention,
and the argument to uphold the law on that ground was brief and
inconsequential.^
There is no reason why we should be reluctant to give effect to new
and additional knowledge upon such a subject as this even if it did
lead us to take a different view of such a vastly important question
as that of public health or disease than formerly prevailed. Par-
ticularly do I feel that we should give serious consideration and great
weight to the fact that the present legislation is based upon and sus-
tained by an investigation by the legislature deliberately and care-
fully made through an agency of its own creation, the present factory
investigating commission.^
These recent cases, dealing with regulation of the hours of labor,
do not stand apart but illustrate two dominant tendencies in current
constitutional decisions :
1. Courts, with increasing measure, deal with legislation affect-
ing industry in the light of a realistic study of the industrial con-
ditions affected.*
2. The emphasis is shifted to community interests, the affirmative
enhancement of the human values of the whole community — not
1189 N.Y. 131, 81 N. E. 778 (1907).
^People v. Schweinler Press, 214 N.Y. 395, 411, 108 N. E. 639, 643 (1915).
^Ibid. 214 N.Y. 395, 412-413, 108 N. E. 639, 644 (1915)-
^McLean v. Arkansas, 211 U.S. 539, S49-SS0 (1908) (it is significant that
Mr. Justice Brewer and Mr. Justice Peckliam dissented) ; Baltimore & Ohio
R.R. V. Interstate Commerce Commission, 221 U.S. 612, 619 (1911).
628 TRADE UNIONISM AND LABOR PROBLEMS
merely society conceived of as independent individuals dealing at
arms' length with one another, in which legislation may only seek to
protect individuals under disabilities or prevent individual aggression
in the interest of a countervailing individual freedom.^
As a result we find that recent decisions have modified the basis
on which legislation limiting the hours of labor is supported. As
science has demonstrated that there is no sharp difference in' kind
as to the effect of labor on men and women, courts recently have
followed the guidance of science and refused to be controlled by out-
worn ignorance. And so we find the Supreme Court of Oregon, in
sustaining the ten-hour law for men, observing that "legislative
regulation of the hours of labor of men and that of women differ
only in the degree of necessity therefor." ^ True enough, we are not
out of the woods of difficulty by saying the question is a matter of
difference of degree. But once that is recognized, once we cease to
look upon the regulation of women in industry as exceptional, as the
law's graciousness to a disabled class, and shift the emphasis from
the fact that they are women to the fact that it is industry and the
relation of industry to the community which is regulated, the whole
problem is seen from a totally different aspect. Once admit it is a
question of degree, there follows the recognition — and the conscious
recognition is important— that we are balancing interests, that we
are exercising judgment, and that the exercise of this judgment,
unless so clear as to be undebatable, is solely for the legislature.^
What, then, are the common factors in the labor of men and
women that would make a limitation of the hours of labor, in em-
ployments not dangerous or inherently unhealthy, to ten hours or
nine hours an exercise of legislative discretion not beyond the pale
of reasonable argument, and therefore to be respected by the courts ?
They are :
I. "The common physiological phenomenon, fatigue," and the
need of rest to repair the waste of the toxin.* Can the point where
^People V. Klinck Packing Co., 214 N.Y. 121, i58, 108 N. E. 278, 280 (1915).
^ State V. Bunting, 71 Ore. 259, 271, 139 Pac. 731, 735 (1914).
^Price V. Illinois, 238 U.S. 446, 452 (1915).
4 See Goldmark, Fatigue and Efficiency, chap. ii. The scientific views set
forth m Miss Goldmark's book recently formed the basis of an arbitration
judgment, in Australia, by Mr. Justice Higgins, in the Waterside Workers' case
(not yet reported).
Hours of labor 629
the line is to be drawn possibly be fixed a priori ? Or, at the least,
in the light of modern physiology is any layman entitled to say that a
limitation of routine manual labor of masses of men to nine hours
is a capricious and willful oppression, without sustaining reason ?^
2. An enlarged conception of leisure and the tendency to regard not
only its relation to the immediate effects upon animal health but
also its bearing on the industrial output and the demands of
citizenship.^
3. Experience, based upon adequate trial, with the gradual reduc-
tion of labor and the slow increase of hours of leisure encouragingly
demonstrates that such limitation of labor and increase of leisure
have been put to fruitful .uses. The tried measures of curtailing
manual labor have added to the sum total of that by which we
measure the civilized aspects of life.^
This, then, was the " state of the art " which confronted the Massa-
chusetts Supreme Court in passing upon the constitutionality of the
nine-hour law in question. One would suppose that in the light of
all this it would be an easy matter for the Court to hold that a nine-
hour day is not "so extravagant and unreasonable, so disconnected
with the probable promotion of health and welfare, that its enactment
is beyond the jurisdiction of the legislature,"* or, at the very least,
that, since the subject is " debatable, the legislature is entitled to its
own judgment." °
Quite the contrary. The Court held that the statute " is an unwar-
rantable interference with individual liberty and an interference with
property rights, and therefore contrary to constitutions which secure
these fundamental rights."^
How could such a result have been reached ?
I. The case was inadequately presented. The Court was not called
upon to pass on the validity of the statute as such, but upon an
agreed statement of facts under the statute to the effect that there
^?rke V. Illinois, 238 TJ. S. 446, 452 (1915), supra.
^See, for example, Hobson, Work and Wealth, particularly chaps, xiv and xv;
Taussig, Inventors and Money Makers, pp. 63, 65 el seq., 71 et seq.; U.S.
Commissioner of Labor Statistics Royal Meeker, Annals, Vol. LXIII, pp. 262, 267.
2 See Goldmark, Fatigue and Efficiency, p. 279.
*Peoplev. Klinck Packing Co., 214 N.Y. 121, 127, 108 N.E. 278, 280 (191S).
^Price V. Illinois, 238 U.S. 446, 452 (191S). ^
^Commonwealth v. Boston & M.R.R., no N.E. (Mass.) 264 (1915).
630 TRADE UNIONISM AND LABOR PROBLEMS
is nothing inherently unhealthy about the work which the employee
did, as it was half performed in the ope^ air and was not arduous.^
The assumption back of such a statement is that where work is not
inherently unhealthy it is immaterial how long such work is pursued.
Thus a wholly unscientific concession of fact was made, and there-
fore a wholly unscientific issue was presented to the Court. But
even such an issue was not supported by the available body of scien-
tific facts. No attempt was made to bring to the attention of the
Court a detailed, painstaking, thoroughly marshaled array of facts to
explain and to fortify the experience and theory back of labor legis-
lation. In other words, the case was not argued in the way in which
the decisions in the MuUer case, the second Ritchie case, the Hawley
case, the Miller case, the Bosley case, and the Schweinler case
demanded that it should be argued.
2. One can therefore understand why the Court found the case
"governed" by the Lochner case, supra.^ Nevertheless, one is com-
pelled to conclude that the illumination that has been cast upon the
Lochner case during the past decade does not leave to that case any
principle which ipso facto controls the validity of specific measures
regulating hours of labor. The principle of the Lochner case is
simple enough: that arbitrary restriction of men's activities, un-
related in reasbn to the "public welfare," offends the Fourteenth
Amendment. As to the principle, there is no dispute. But the prin-
ciple is the beginning and not the end of the inquiry. The field of
contention is in its application. The Lochner case, judged by its his-
tory and by more recent decisions of the Supreme Court, does not in
itself furnish the yardstick for its, application.
a. It is now clearly enough recognized that each case presents a
distinct issue ; that each case must be determined by the facts rele-
vant to it ; that we are dealing, in truth, not with a question of law
but the application of an undisputed formula to a constantly chang-
ing and growing variety of economic and social facts.^ Each case,
''■Commonwealth v. Boston & M.R.R., no N. E. (Mass.) 264 (1915).
^Lochner v. New York, 198 U.S. 45 (igos).
3See People v. Schweinler Press, 214 N. Y. 395, 411-412, 108 N. E. 639, 643
(191S); Bosley v. McLaughlin, 236 U.S. 385, 392 et seq. (1915); MUler v.
Wilson, 236 U. S. 373, 382 (191S) ; McLean v. Arkansas, 211 U. S. 539, 549-550
(1908).
HOURS OF LABOR 631
therefore, calls for a new and distinct consideration not only of the
general facts of industry but the specific facts in regard to the
employment in question and the specific exigencies which called for
the specific statute.
b. The groundwork of the Lochner case has by this time been
cut from under. The majority opinion was based upon "a common
understanding " as to the effect of work in bakeshops upon the public
and upon those engaged in it. "Common understanding" has ceased
to be the reliance in matters calling for essentially scientific deter-
mination. "Has not the progress of sanitary science shown," Professor
Freund pertinently inquires, "that common understanding is often
equivalent to popular ignorance and fallacy?"^ On the particular
issue involved in the Lochner case "study of the facts has shown that
the legislature was right and the Court was wrong."^ Either because
of matters as to which the Court of its own knowledge cannot know,
or, because, not knowing, it cannot assume the nonexistence of facts,
contested legislative action should be resolved in favor of rationality
rather than capricious oppression. Happily the fundamental consti-
tutional doctrine of the assumption of rightness of legislative conduct,
where the court is uninformed, is again rigorously being enforced by
the United States Supreme Court.^
c. So far as the general flavor of the Lochner opinion goes, it surely
is no longer "controlling." If the body of professional opinion counts
''■Green Bag, Vol. XVII, pp. 411, 416.
^Professor Roscoe Pound, "Liberty of Contract," Yale Law Journal, Vol.
XVIII, pp. 454, 480, and n. 123 (see above, Chapter XXXVII).
3 Thus, in one of its latest opinions, the Supreme Court refused to upset a
"police measure" with the following language:
"Petitioner makes his contention depend upon disputable considerations of
classification and upon a comparison of conditions of which there is no means
of judicial determination and upon which nevertheless we are expected to
reverse legislative action. . . ." {Hadacheck v. Sebastian, 239 U. S. 394, 413
(Dec. 20, 191S)).
Here, as elsewhere in the law, Mr. Justice Holmes long ago put the matter
with acute finality: "I cannot pronounce the legislation [prohibiting fines against
weavers for defective workmanship] void, as based on a false assumption, since
I know nothing about the matter one way or the other" (Commonwealth v.
Perry, 155 Mass. 117, 124-125, 28 N. E. 1126, 1127 (1891)). As to the reason-
ableness of the legislature's belief that a system of fines affords dangerous'
temptations for oppressive use, see R. H, Tawney, Minimum Rates in the Tailor-
ing Industry, pp. 60 and 95.
632 TRADE UNIONISM AND LABOR PROBLEMS
for anything in the appraisal of authority of a decision (itself decided
by a divided court, and since departed from in effect in an important
series of cases), it has been impressively arrayed against this decision.
If ever an opinion has been subjected to the weightiest professional
criticism, it is the opinion in the Lochner case. Judge Andrew Bruce,
Professor Ernst Freund, Judge Learned Hand, Professor Roscoe
Pound — to mention no others — surely speak with high competence
upon this subject. Nevertheless, the body of persuasive authority
which their writings present was not brought to the Court's attention
and failed to be considered in the disposition of the case.^
The circumstances which resulted in this decision reveal anew a sit-
uation of far-reaching importance. For it affects the very bases on
which constitutional decisions are reached and therefore affects vitally
the most sensitive point of contact between the courts and the people.
The statute under discussion may well have been of no particular
social import. The decision which nullified it, one may be sure, offers
no intrinsic obstruction to needed legislation and in itself has merely
ephemeral vitality. But, unfortunately, the evil that decisions do
lives after them. Such a decision deeply impairs that public con-
fidence upon which the healthy exercise of judicial power must rest.
Under the present-day stress of judicial work it is inevitable that
courts, on the whole, can only decide specific cases as presented to
lA. A. Bruce, "The lUinois Ten Hour Labor Law for Women," Michigan
Law Review, Vol. VIII, p. i ; G. S. Corwin, " The Supreme Court and the
Fourteenth Amendment," Michigan Law Review, Vol. VII, p. 643 ; Ernst Freund,
"Limitation of Hours of Labor and the Federal Supreme Court," Green' Bag,
Vol. XVII, p. 411, "Constitutional Limitations and Labor Legislation," Illinois
Law Review, Vol; IV, p. 609; L. N. Greeley, "The Changing Attitude of the
Courts toward Social Legislation," Illinois Law Review, Vol. V, p. 222 ; Learned
Hand, " Due Process of Law and the Eight Hour Day," Harvard Law Review,
Vol. XXI, p. 49S ; Sir Frederick Pollock, " The New York Labor Law and the
Fourteenth Amendment," Law Quarterly Review, Vol. XXI, p. 211 ; Roscoe
Pound, "Liberty of Contract," Yale Law Journal, Vol. XVIII, p. 480. Cf.
Mr. Wigmore's comment on "The Qualities of Current Judicial Decisions,"
Illinois Law Review, Vol. IX, pp. 529, S30-531.
But see Atkins v. Grey Eagle Coal Co., 84 S. E. 906 (191S), where the Court
of Appeals of West Virginia sustained a truck act, in effect overruling the
decision in State v. Goodwill, 33 W. Va. 179 (1889), and cited among its au-
thorities Professor Pound's article "Liberty of Contract," Yale Law Journal,
Vol. XVIII, p. 480 (see above. Chapter XXXVII) .
HOURS OF LABOR 633
them.^ In other words, the substantial dependence upon the facts
and briefs presented by counsel throws the decision of the courts
largely upon those chances which determine the selection of counsel.
These are, of course, necessary human drawbacks, and the practice
works out well enough in controversies where purely individual inter-
ests are represented by counsel. This is not the situation in cases
such as the one before the Massachusetts court. The issue submitted
to the Court in fact was the issue as determined by the District Attor-
ney of Worcester and counsel for the Boston and Maine Railroad.
In truth, the issue was between the court and the legislature. In
such a case either the legislative judgment should be sustained if
there is "no means of judicial determination" that the legislature is
indisputably wrong,^ or the court should demand that the legislative
judgment be supported by available proof.^ It would seem clear
that courts have inherent power to accomplish this by indicating the
kind of argument needed to reach a just result or even by calling for
argument from members of the bar — officers of the court — of partic-
ular equipment to assist in a given problem.* If legislation be neces-
sary. New York furnishes an example in its recent enactment
authorizing the courts to request the attendance of the attorney-
general in support of an act of the legislature when its constitutionality
is brought into question.'
These, after all, are only expedients. Fundamental is the need
that the profession realize the true nature of the issues involved in
these constitutional questions and the limited scope of the reviewing
power of the courts.* With the recognition that these questions raise,
substantially, disputed questions of fact must come the invention
^See Mr. Justice Swayze in "The Growing Law," Yale Law Journal, Vol. XX,
pp. I, 18-19. People V. Schwemler Press, 214 N. Y. 395, 411, 108 N. E. 639,
643 (1915).
^Hadacheck v. Sebastian, 239 U. S. 394, 413 (191S) ; Price v. Illinois, 238 U. S.
446, 4S2 (1915)-
2 Professor Ernst Freund, "Constitutional Limitations and Labor Legisla-
tion," Illinois Law Review, Vol. IV, pp. 609, 622.
*It is interesting to note that the chief arguments in the series of cases be-
ginning with the Muller case were made by an amicus curiae, Mr. Louis D.
Brandeis, in behalf of the National Consumers' League.
^New York Laws, 1913, chap. 442, p. 919.
'See Harvard Law Review, Vol. XXVIII, p. 790.
634 TRADE UNIONISM AND LABOR PROBLEMS
of some machinery by which knowledge of the facts, which are the
foundation of the legal judgment, may be at the service of the courts
as a regular form of the judicial process. This need has been voiced
alike by jurists and judges.^ Once the need shall be felt as the com-
mon longing of the profession, the inventive powers of our law will
find the means for its satisfaction.
Felix Frankfurter
Hakvard Law Schooi.
^Professor Roscoe Pound, in "Legislation as a Sodal Function," Publica-
tions American Sociological Society, Vol. VII, pp. 148, 161, says: "In the im-
mediate past the social facts required for the exercise of the judicial function of
lawmaking have been arrived at by means which may fairly be called mechanical.
It is not one of the least problems of the sociological jurist to discover a
rational mode of advising the court of facts of which it is supposed to take judi-
cial notice." So (in dealing with a somewhat similar problem) Judge Learned
Hand, in Parke Davis & Co. v. Mulford & Co., 189 Fed. 95, 115 : "How long we
shall continue to blunder along without the aid of unpartisan and authoritative
scientific assistance in the administration of justice, no one knows; but all fair
persons not conventionalized by provincial legal habits of mind ought, I should
think, unite to effect some such advance." Cf. also Steenerson v. Great North-
ern Ry., 69 Minn. 353, 377. 72 N.W. 713, 716 (1897).
XXXIX
COLLECTIVE BARGAINING BEFORE THE
SUPREME COURT ^
IN THREE important cases a majority of the United States Su-
preme Court has thwarted efforts of labor unions to increase
their numbers. In all three there was vigorous dissent. All three
were opposed to the judgment of the court below. The first two
found statutes wanting in the requirements .of due process of law.
Adair v. United States^ armuUed an act of Congress which prohibited
interstate carriers from discharging an employee because of his
membership in a labor union. Coppage v. Kansas^ declared invalid
a state law which forbade any employer to require of employees or
of persons seeking employment an agreement not to become or
remain a member of a labor union. The third decision is Hitchman
Coal and Coke Company v. Mitchell et al.,* handed down last De-
cember. It deals with a situation created by the type of agreement
which Kansas sought unsuccessfully to forbid. Officers of a labor
union were restrained by injunction from securing secret promises
to join the union from employees who had agreed to relinquish their
employment in case they became members.
Each of these decisions was rendered in the name of freedom and
liberty. But since each dealt with conflicting interests, each neces-
sarily involved interfering with liberty as well as protecting it. The
majority judges of the Supreme Court must have thought that the
liberty they safeguarded was for some reason entitled to more con-
sideration than the liberty they curtailed. And the minority and the
judges below must have held contrary views. The importance of the
decisions and of the court which rendered them may make it profit-
able to review the various opinions, and try to arrange the controlling
^From Political Science Quarterly, Vol. XXXIII (1918), pp. 396-429.
2 208 U.S. 161 (1908).
'236 U.S. I (191S). *345 U.S. 232 (1917).
63 s
636 TRADE UNIONISM AND LABOR PROBLEMS
reasons for the divergent views. In so far as the opinions do not lend
themselves to this purpose an endeavor will be made to indicate
the fact. It not infrequently happens that a judicial opinion, like
the arguments of counsel, starts from a selected premise which has
in it the seeds of a desired result, and neglects to weigh that premise
in even scales against competing premises which are equally signifi-
cant but which bear other fruit.
Only four of the judges sat in all three cases. Of these Chief
Justice White was consistently with the majority, and Mr. Justice
Holmes with the minority. Mr. Justice McKenna was with the
majority in the Coppage case and the Hitchman case, and with the
minority in the Adair case. Mr. Justice Day dissented in the Cop-
page case and concurred in the other two. Justices Pitney, Van
Devanter and McReynolds sat in the Coppage case and the Hitchman
case and concurred in both. With them in the Coppage case was
Mr. Justice Lamar ; against them, Mr. Justice Hughes. Chief Jus-
tice Fuller and Justices Harlan, Peckham, and Brewer completed
the majority in the Adair case; and Justices Brandeis and Clarke,
the minority in the Hitchman case.
The Adair case involved no dispute as to the facts, as the respond-
ent by demurring to the indictment confessed that he had discharged
an employee of an interstate railroad because of his membership in
a labor union. The sole issue before the Court was the constitution-
ality of the statute forbidding such discharge. And the opinion of
Mr. Justice Harlan maintained its unconstitutionality by asserting it.
Adair was an agent of the carrier. It was his right, says the
learned justice, " and that right inhered in his personal liberty, and
was also a right of property, to serve his employer as best he could,
so long as he did nothing that was reasonably forbidden by law as
injurious to the public interests." This seems a prelude to a con-
sideration of the question of reasonableness. But we are not thus
favored. Instead, we are informed again that "it was the right of
the defendant to prescribe the terms upon which the services of
Coppage [the employee] would be accepted, and it was the right
of Coppage to become or not, as he chose, an employee of the
railroad company upon the terms offered him."
COLLECTIVE BARGAINING 637
This describes the legal situation before the passage of the statute.
The parties were at hberty to bargain as they pleased about the
affiliation of the employee with a union. But what we need to know
is why the legal situation created or sanctioned by the common law
cannot be changed by statute. We do not gain light on this point
from any recital of the rights of the parties at common law, however
oft repeated. Mr. Justice Harlan quotes a statement from Cooley
that "it is a part of every man's civil rights that he be left at liberty
to refuse business relations with any person whomsoever, whether
the refusal rests upon reason, or is the result of whim, caprice, prej-
udice, or malice." ' But this is from a treatise on torts, and is evi-
dently intended to mean that a man is not liable in tort for refusing
to hire another or to work for another. It does not throw light on
the question whether a new statutory arrangement is reasonable
enough to be constitutional.
The succeeding paragraph in the opinion takes us no further in
our quest. It cites Lochner v. New York,^ and says that all the
Court were agreed "as to the general proposition that there is a
liberty of contract that cannot be unreasonably interfered with by
legislation." Next follows the concession that the "right of liberty"
is subject "to such reasonable restraints as the common good or
general welfare may require." But this is succeeded not by a dis-
cussion of the question of reasonableness but by a neglect of it.
Note the significant silence on the controlling issue: ". . . it is
not within the functions of government — at least in the absence of
contract between the parties — to compel any person, in the course
of his business, and against his will, to accept or retain the personal
services of another." After reiterating again the common-law rights
of the employer and of the employee the opinion continues :
In all such particulars the employer and the employee have equal-
ity of right, and any legislation that disturbs that equality is an
arbitrary interference with the liberty of contract which no govern-
ment can legally justify in a free land.
There is more to the same effect. Summing it up, the statute is un-
constitutional because it is unconstitutional.
It is not surprising that such an avoidance of the question of
reasonableness prompts Mr. Justice McKenna to open his dissent
1198 U.S. 45 (190S).
638 TRADE UNIONISM AND LABOR PROBLEMS
by saying, " The opinion of the Court proceeds upon somewhat nar-
row lines and either omits or does not give adequate prominence
to the considerations which, I think, are determinative of the ques-
tions in the case." And later he suggests that an inquiry be made
as to the purpose of the legislation "without beating about in the
abstract."
This purpose Mr. Justice McKenna finds in the other provisions
of the statute setting forth a plan of arbitration to prevent the
strikes which are apt to arise from disputes between employers and
employed. The unions among railroad employees, he says, exist
and are a fact to be reckoned with. They create a unity among
employees which may be an obstacle or an aid to arbitration.
Congress sought to make this unity an aid in the settlement of
labor disputes. The requirement is therefore in the public interest.
It is imposed only on those engaged in a public-service enter-
prise, who are subject to control in the interest of the public.
With the rights of those engaged in private business "we are not
concerned."
Mr. Justice McKenna therefore finds the restriction on the liberty
of the carriers a reasonable one, because, accepting conditions as
they are, it will tend to prevent strikes. Mr. Justice Harlan dis-
misses this alleged justification in a somewhat roundabout way. He
enters upon the question in order to discover whether the act is a
regulation of interstate commerce. This is in response to some
argument which he calls a suggestion that the act "can be referred
to the power of Congress to regulate interstate commerce, without
regard to any question of personal liberty or right of property under
the Fifth Amendment." If the argument was put in this way, it
confused two distinct questions. The opinion recognizes this when
it says later that the power over commerce "cannot be exerted in
violation of any fundamental right secured by other provisions of
the Constitution." And if the act is not a regulation of interstate
commerce it is unconstitutional, even if it does not also violate the
Fifth Amendment, So that the majority, by holding that the objects
of the statute are not within the purview of the commerce power,
avoids explicit analysis of the reasons adduced by the minority for
the reasonableness of its interference with liberty.
COLLECTIVE BARGAINING 639
Mr. Justice Harlan prefaces his consideration of the commerce
question by saying :
Manifestly, any rule prescribed for the conduct of interstate com-
merce, in order to be within the competency of Congress under its
power to regulate commerce among the states, must have some
real or substantial relation to or connection with the commerce
regulated.
Then follows the rhetorical question, "But what possible legal or
logical connection is there between an employee's membership in a
labor organization and the carrying on of interstate commerce?"
In first analysis, of course, the connection is factual. Whether it is
also logical depends upon the logician ; whether it is legal, upon the
judge. Mr. Justice Harlan finds no link between labor unions and
commerce, because " it is the employee as a man, and not as a mem-
ber of a labor organization, who labors in the service of an interstate
carrier." "Surely," he says, "those associations, as labor organiza-
tions, have nothing to do with interstate commerce."^ The argu-
ment to the contrary he regards as based upon the assumption that
"members of labor organizations would, by illegal or violent meas-
ures, interrupt or impair the freedom of commerce among the
states." And of such assumptions he says: "We will not indulge
in any such conjectures, nor make them, in whole or in part, the
basis of our decision. We could not do so consistently with the
respect due to a coordinate department of the government."
Mr. Justice McKenna's respect for Congress takes a different form.
He sees that the power of labor unions "may be effectively exercised
without violence or illegality," and he quotes from a report of the
Senate Committee to show that the legislation was based not on
conjecture but on experience. Of the argument of the majority he
says, "Neither the supposition nor the disrespect is necessary, and,
^It is interesting to compare a statement of Mr. Justice Pitney on behalf of
the majority in the Coppage case, in which he says that "it cannot be judicially
declared that membership in such an organization has no relation to a member's
duty to his employer" (236 U.S. i, 19). In the Coppage case it was the
argument in favor of the statute which urged that "membership in a labor
organization is the 'personal and private affair' of the employee."
In sustaining the Adamson Law in Wilson v. New, 243 U.S. 332 (1917), a
majority of the Supreme Court in effect discountenanced the application of the
commerce clause adopted by the majority in the Adair case.
640 TRADE UNIONISM AND LABOR PROBLEMS
it may be urged, they are no more invidious than to impute to
Congress a careless or deliberate or purposeless violation of the con-
stitutional rights of the carriers."
Plainly Mr. Justice Harlan avoids due consideration of the justifi-
cations for the restraint imposed on the carriers. But Mr. Justice
McKenna also fails to give due weight to the burden of that restraint
upon them. The act, he says, restrains nothing "which is of any
material interest to the carrier." He assumes that the discharge of
an employee because of membership in a union is "the exercise of
mere whim or caprice," or at any rate that it may be, and that " this
is the liberty which is attempted to be vindicated as the constitutional
right of the carrier." And on this assumption he comments elo-
quently: "Liberty is an attractive theme, but the liberty which is
exercised in sheer antipathy does not plead strongly for recognition."
Mr. Justice Holmes looks deeper. In a separate dissent he says
that "the section is, in substance, a very limited interference with
the freedom of contract, no more. It does not require the carriers to
employ anyone. It does not forbid them to refuse to employ anyone,
for any reason they deem good." And he puts his finger on the
artificiality of the individualistic approach to the problem by adding,
"... even where the notion of a choice of persons is a fiction and
wholesale enqployment is necessary upon general principles that it
might be proper to control." The statute, he finds, "simply prohibits
the more powerful party to exact certain undertakings, or to threaten
dismissal or unjustly discriminate on certain grounds against those
already employed." If there is believed to be an important ground
for the restraint, " the Constitution does not forbid it, whether this
Court agrees or disagrees with the policy pursued." Mr. Justice
Holmes does not confine his sanction to the object of preventing
strikes. Though he thinks that laboring men are apt to attribute to
unions advantages "that really are due to economic conditions of a
wider and deeper kind," he says that he "could not pronounce it un-
warranted if Congress should decide that to foster a strong union
was for the best interest, not only of the men, but of the railroads
and the country at large." And his conclusion, which he puts at the
beginning of his opinion, is stated as follows: "I also think that
the statute is constitutional, and, but for the decision of my brethren,
I should have felt pretty clear about it."
COLLECTIVE BARGAINING 641
So much for the arguments of the judges. Mr, Justice Holmes
sees the issue as one of poHcy which it is for Congress to decide.
The majority find some eternal right of the carrier to be left
alone, against which Congress beats in vain. They build this right on
the common-law right of the carrier to be immune from damages if it
dismissed an employee because he was a member of a union. But
this common-law right was a judicial creation with respect to an
issue between man and man. The issue in the Adair case is one
between man and government. The new right of the carrier discov-
ered by the Adair case is wholly different from that which it had at
common law. An immunity against an individual has been enlarged
into an immunity against the government. Yet the Court seems to
think that it is merely protecting an old right and not creating
a new one. Thus it avoids giving any substantial reason for its
decision.
The majority recognizes that the issue before the Court is one of
reasonableness. The merit of its opinion depends, therefore, upon its
discussion of that issue. Legislatures are fortunate in not being
called upon to give reasons for the law they make. Courts are under
a duty to give weighty and specific reasons before they unmake the
law made by the legislature. They may not inappropriately be held
subject to the canon that the vigorous assertion of a conclusion is
not the giving of a reason for it. Judged by this canon, the major-
ity opinion in the Adair case is sadly wanting. Its declaration that
it is not within the functions of government to compel a person
against his will to retain the services of another is beside the point,
because Congress did not compel the carrier to retain the services
of any of its employees. There is a wide difference between prohibit-
ing discharge for a single, specified reason and prohibiting discharge
altogether. The Court cannot convince us of the unreasonableness
of what Congress did by telling us that it is not within the func-
tions of government to do something much more drastic. It does
not enlighten us on the question of reasonableness by the rhetorical
iiat that "the employer and the employee have equality of right, and
any legislation that disturbs that equality is an arbitrary interfer-
ence with liberty of contract which no government can legally justify
in a free land." Yet it is on this fiat that the decision rests, and not
on anything that can be dignified with the title of a reason.
642 TRADE UNIONISM AND LABOR PROBLEMS
II
This question of the disturbance of the equality between employer
and employed receives further discussion in the opinions in the
Coppage case. The majority in that case insist that a statute which
forbids an employer to require of a laborer, as a condition of obtain-
ing or remaining in emplo3mient, an agreement not to become or to
remain a member of a labor union is as vicious as one which forbids
dismissal because of membership in a union. If the employer must
remain free to discharge an employee for any reason that seems to
him good, he must be permitted to announce in advance what reasons
he will deem sufficient for discharge. "Granted the equal freedom
of both parties to the contract of employment, has not each party
the right to stipulate upon what terms only he will consent to the
inception, or to the continuance, of that relationship?"
Mr. Justice Holmes, in a brief dissent, did not seek to distinguish
the problem before the Court from that involved in the Adair case.
He thought that the Adair case should be overruled. But Mr. Jus-
tice Day, who concurred in the Adair case, distinguishes it from the
case in hand, in which he dissents. His reasons are as follows :
There is a real, and not a fanciful, distinction between the exer-
cise of the right to discharge at will and the imposition of a require-
ment that the employee, as a condition of employment, shall make a
particular agreement to forego a legal right. The agreement may be,
or may be declared to be, against public policy, although the right of
discharge remains. When a man is discharged, the employer exer-
cises his right to declare such action necessary because of the exigen-
cies of his business, or as the result of his judgment for other reasons
sufficient to himself. When he makes a stipulation of the character
here involved essential to future employment, he is not exercising a
right to discharge, and may not wish to discharge the employee
when, at a subsequent time, the prohibited act is done. What is in
fact accomplished is that the one engaging to work, who may wish to
preserve an independent right of action, as a condition of employment
is coerced to the signing of such an agreement against his will, per-
haps impelled by the necessities of his situation.
In illustration of his point Mr. Justice Day refers to such possible
stipulations as that a person seeking employment shall agree not to
resort to the courts for redress in case of disagreement with his em-
ployer, or not to become a member of the National Guard, or not to
COLLECTIVE BARGAINING 643
affiliate with a particular political party. The requirement of such
agreements in advance, he insists, is the exercise of a wholly
different liberty from those of not employing or of discharging
after employing.
There is a difference, of course. But whether the difference is
sufficient to entitle one who dissents in the Coppage case to concur
in the Adair case is more difficult to determine. Mr. Justice Day
does not establish the importance of his distinction by saying that
the Kansas statute "reaches not only the employed, but as well,
one seeking employment," who "by signing such agreements" is
"deprived of the right of free choice as to his future conduct." So
long as the employee remains legally free to quit his employment at
any time, he may always choose between joining a union or keeping
his job. So far as we can reason about it the agreement would seem
to have no wider direct results as between employer and employee
than would ensue from the announcement by the employer that
he ran and would continue to run a closed nonunion shop. But
psychological considerations may enter in to make a difference. Evi-
dently the employers think that the securing of the individual agree-
ments at the time of hiring is an aid in their endeavor to avert the
pressure of collective bargaining on the part of the men. And, as
will appear later from the Hitchman case, the existence of a contract
between employer and employed gives a weapon to the former
against third parties who seek to unite employees in a demaod that
they be retained as union men. The majority, therefore, do not find
in the Adair case a complete precedent for the Coppage case. Never-
theless, the major issue in both cases is whether the legislature may
aid laborers in their efforts to secure collective bargaining.
This evidently is the way Mr. Justice Holmes views it. In a dis-
sent which takes only a paragraph he says :
In present conditions a workman not unnaturally may believe that
only by belonging to a union can he secure a contract that shall be
fair to him. If that belief, whether right or wrong, may be held by a
reasonable man, it seems to me that it may be enforced by law in
order to establish the equality of position between the parties in
which liberty of contract begins. Whether in the long run it is wise
for the workingmen to enact legislation of this sort is not my con-
cern, but I am strongly of opinion that there is nothing in the Con-
stitution of the United States to prevent it. . ,. .
644 TRADE UNIONISM AND LABOR PROBLEMS
Thus Mr. Justice Holmes regards the statute as a promoter of
liberty and equality. The majority regard it as an interference with
both. This is not to say that they disagree as to the results the
law sought to produce. Their difference relates to the characteriza-
tion of those results. It goes to the essence of what each means
by liberty and equality.
To the minority liberty and equality mean something actual
and concrete. Mr. Justice Day says of the Kansas statute, "I
think that the Act now under consideration, and kindred ones, are
intended to promote the same liberty of action for the employee, as
the employer confessedly enjoys." It is a step towards making them
equal in bargaining power. It prohibits "coercive attempts" on the
part of employers to deprive employees "of the free right of exer-
cising privileges which are theirs within the law." To the argument
of the majority that there is no element of coercion in offering an
employee a choice between his union and his job, Mr. Justice Day
says that this neglects the facts as to the relative positions of em-
ployer and employed. The choice legally open to the employee is
not actually open to him. He cannot enjoy his legal right to be a
member of a union if he is hampered thereby in working for his
living in the occupation for which he is best fitted.
To this the majority reply that "constitutional freedom of con-
tract does not mean that a party is to be as free after making a
contract as before." By agreeing to work, the employee yields the en-
joyment of his legal right to use his time as he pleases. " Freedom
of contract, from the very nature of the thing, can be enjoyed only
by being exercised ; and each particular exercise of it involves mak-
ing an engagement which, if fulfilled, prevents for the time any in-
consistent course of conduct." While an individual has a legal right
to join a union, "he has no inherent right to do this and still remain
in the employ of one who is unwilling to employ a union man."
This, of course, is but to reiterate the common-law situation.
The statute meant to give the employee a freedom he did not have
at common law.^ The minority says that his ancient legal liberty
iThe statute may be viewed as a declaration that the legal right to be a
member of a union shall not be subject to sale. Common law and equity are
familiar with restrictive covenants on one's future freedom of action which are
denied jural recognition. Restraints of one's future conduct connected with
earning a livelihood have always been outlawed when regarded as unreasonable.
COLLECTIVE BARGAINING 645
was not an actual liberty, and that it is within the power of the
state to add to his actual liberty. In so doing it cuts down the
legal liberty of the employer, but it leaves him with an actual
liberty which, by reason of his economic superiority, is equal to the
actual liberty of the employee.
This discussion of liberty is of value only as it leads to the issue
of equality. Of course no one has actual liberty to use all his legal
liberty. He must pick and choose. Everyone is subject to some
degree of economic coercion. Mr. Justice Day's statement that the
Kansas statute "has for its avowed purpose the protection of the
exercise of a legal right" to join a union is true enough so far as it
goes. But it has the same incompleteness which marks the argument
of the majority that the statute interferes with the legal right of
employers to prescribe the conditions on which they will make con-
tracts. The protection of the common-law right of the one is
gained only by limiting the common-law right of the other. All argu-
ment is vain which confines itself to the elaboration of the effect of
the statute on one of these rights, disregarding its effect on the
other.
The common law left the employee free to join a union. It left
the employer free to decline to hire members of a union. In some
upper conceptual chamber these two common-law liberties may dwell
together in amity. In actual life they conflict. The conflict had to
be resolved in the course of a struggle in which the public interests
suffered. If the state is to step in to aid the public interest by reduc-
ing the friction between the parties, it must do something more
than to sanction what already exists. The minority is correct in its
position that the state has protected the exercise of the legal liberty
of the employee. The majority is correct in its assertion that the
state has interfered with a previous legal liberty of employers. The
issue is whether the former is a justification for the latter.
The majority, in seeking for possible justifications, find none.
Other interferences with liberty which have been judicially sanc-
tioned have been "fairly deemed necessary to secure some object
directly affecting the public welfare." But of the statute in ques-
tion, putting aside the question of coercion, Mr. Justice Pitney says :
. . . there is no object or purpose, expressed or implied, that is
claimed to have reference to health, safety, morals, or public welfare,
646 THADE UNIONISM AND LABOR PROBLEMS
beyond the supposed desirability of leveling inequalities of for-
tune by dqjriving one who has property of some part of what is
characterized as his "financial independence." In short, an interfer-
ence with the normal exercise of personal liberty and property rights
is the primary object of the statute, and not an incident to the
advancement of the general welfare.
This is to say that the object of the statute is to promote
equality of actual opportunity, solely for the sake of that equal-
ity— a result which could not promote the general welfare. More-
over, the Constitution is regarded as having been designed to
prevent the legislature from promoting equality of opportunity.
Inequality is the necessary result of the institution of private
property. "Wherever the right of private property exists there
must and will be inequalities of fortune." It is "impossible to
uphold freedom of contract and the right of private property without
at the same time recognizing as legitimate those inequalities of for-
tune that are the necessary result of the exercise of those rights."
Since a state may not cut down the rights of private property directly,
it "may not do so indirectly, as by declaring in effect that the
public good requires the removal of those inequalities that are but
the normal and inevitable result of their exercise, and then invoking
the police power in order to remove the inequalities, without other
object in view."
Constitutional liberty of contract, therefore, is not "freedom of
action." It is freedom from legislative interference with action.
This is freedom for employer and employee alike, even though for
the employee it is but the wraith of genuine freedom. Equality
between employer and employee is not approximate evenness of bar-
gaining position. It exists only when both are equally let alone by
the legislature. The state may not, as Mr. Justice Holmes contends,
"establish the equality of position in which liberty of contract be-
gins." It must not interfere with that inequality of position which
enables the one with superior position to drive a hard bargain. The
owner of property must be guaranteed an advantage in all his deal-
ings with those who have less than he. In the words of Mr. Justice
Pitney :
Indeed, a little reflection will show that wherever the right of
private property and the right of free contract coexist, each party
COLLECTIVE BARGAINING 647
when contracting is inevitably more or less influenced by the ques-
tion whether he has much property or little or none ; for the con-
tract is made to the very end that each may gain something he needs
or desires more urgently than that which he proposes to give in
exchange.
To him that hath shall be given protection not only of that which he
hath but of every leverage which his possessions give him in acquiring
more. To him that hath not shall be given the solace that he is
free and unrestrained by law as to the bargains he shall make. He
may be influenced as much as he likes by the fact that he has little
property or none. He lives in a land of freedom and equality.
This is where we should arrive by uniting an absolute conception
of liberty of contract with an absolute conception of property, and
then regarding the marriage as indissoluble. Of course no one means
to carry the sanctity of inequality so far. Otherwise all antitrust
laws would be unconstitutional. For they deprive those who have
superior position from using that position as a leverage to improve it
still further. They promote actual equality by restraining the strong
for the sake of the weak. It is quite as nearly correct to say they
have no other object in view as it is to say that the Kansas statute
has no other object in view. Whether in either case "an interfer-
ence with the normal exercise of personal liberty and property
rights" is "the primary object of the statute" or is "an incident to
the advancement of the general welfare" depends upon a judgment
whether the primary results of the interference conduce to the gen-
eral welfare. It is equally possible arbitrarily to stigmatize either
interference as a primary object and not a means to something else.
Each necessarily results in something else. Each involves "the
supposed desirability" of "leveling inequalities of fortune," in the
sense that each seeks to enhance the purchasing power of a large
group of the public to the consequent diminution of the purchasing
power of another group. Both deal with the distribution of what is
to be created in the future. Neither involves redivision of commod-
ities now possessed. Mr. Justice Day draws the parallel as follows :
Wherein is the right of the employer to insert this stipulation in
the agreement any more sacred than his right to keep up prices'
He may think it quite as essential to his "financial independence,"
and so in truth it may be if he alone is to be considered. But it is
648 TRADE UNIONISM AND LABOR PROBLEMS
too late to deny that the legislative power reaches such a case. It
would be difficult to- select any subject more intimately related to
good order and the security of the community than that under consid-
eration— whether one takes the view that labor organizations are
advantageous or the reverse. It is certainly as much a matter for
legislative consideration and action as contracts in restraint of trade.
Good order and the security of the community — these are the
justifications which Mr. Justice Day and Mr. Justice Hughes find
for the statute. This is to be attained by preventing what is in fact
coercion, though it be a kind of coercion not forbidden by the com-
mon law. It is to be gained by substituting an actual equality for
an artificial equality, or, as Mr. Justice Holmes puts it, by establish-
ing the equality of position between the parties in which liberty of
contract begins. "Good order and the security of the community"
are certainly worthy objects of legislative endeavor. But they are
also vague phrases to conjure with. They are slogans rather than
reasons. They help no more in debate than does the phrase " general
welfare." Both the majority and the minority in the Coppage case
agree that if the statute under consideration promotes the general
welfare, it is constitutional. The majority see that assistance to col-
lective bargaining has the evil of leveling inequality, and they see
nothing more. The minority hold inequality less precious. And so
we are left with only the disagreement as to what constitutes the
general welfare and what is a legitimate promotion of that welfare.
Those who are disheartened at finding that all the competing
reasoning, or arguing, leads but to a blind alley may find sympathy,
if not solace, in a statement made by Mr. Justice Holmes when chief
justice of Massachusetts. In his dissenting opinion in Vegalakn v.
Guntner,^ which he incorporates by reference in his dissent in the
Coppage case, he says :
It is on the question of what shall amount to a justification, and
more especially on the nature of the considerations which really deter-
mine or ought to determine the answer to that question, that judicial
reasoning seems to me often to be inadequate. The true grounds of
decision are considerations of policy and of social advantage, and it
is vain to suppose that solutions can be attained merely by logic
and general propositions of law which nobody disputes. Propositions
as to public policy rarely are unanimously accepted, and still more
I167 Mass. 92 (1896).
COLLECTIVE BARGAINING 649
rarely, if ever, are capable of unanswerable proof. They require a
special training to enable anyone even to form an intelligent opinion
about them.^
If the opinions in the Coppage case do not deal satisfactorily with
the determining issue, they are not alone in their deficiencies. Like
many other judicial opinions they use methods unsuited to the task
in hand. But though they give us little or no guidance in forming
an intelligent judgment on the merits of the legislation under review,
they afford interesting evidence of the methods by which constitu-
tional limitations are actually interpreted and applied.
iln the opinion from which this is taken Chief Justice Holmes contended
that one group of laborers were justified in promoting their own advantage by
seeking to dissuade another group from continuing in the service of an employer
at the existing scale of wages. In Plant v. Woods, 176 Mass. 492 (igoo), to
which Mr. Justice Holmes also refers in his dissent in the Coppage case, he
contended that members of one labor union were justified in seeking to compel
members of another union to desert it and join with them, and as a means to
this end to threaten strikes and boycotts. His approach to the problems may
be indicated by two quotations. In the Guntner case he says : " I have seen the
suggestion made that the conflict between employers and employed was not
competition. But I venture to assume that none of my brethren would rely on
that suggestion. If the policy on which our law is founded is too narrowly
expressed in the term 'free competition,' we may substitute 'free struggle
for life.' Certainly the policy is not limited to struggles between persons
of the same class, competing for the same end. It applies to all conflicts
of temporal interests." And he closes his dissent in Plant v. Woods as fol-
lows: "Although this is not the place for extended economic discussion, and
although the law may not always reach ultimate economic conceptions, I
think it well to add that I cherish no illusions as to the meaning and effect of
strikes. While I think the strike a lawful instrument in the universal struggle
of life, I think it pure phantasy to suppose that there is a body of capital of
which labor as a v/hole secures a larger share by that means. The annual prod-
uct, subject to an infinitesimal deduction for the luxuries of the few, is directed
to consumption by the multitude, and is consumed by the multitude, always.
Organization and strikes may get a larger share for the members of an organi-
zation, but, if they do, they get it at the expense of the less organized and less
powerful portion of the laboring mass. They do not create something out of
nothing. It is only by divesting our minds of questions of ownership and other
machinery of distribution, and by looking solely at the question of consumption
— asking ourselves what is the annual product, who consumes it, and what
changes would or could we make — that we can keep in the world of realities.
But, subject to the qualifications which I have expressed, I think it lawful for
a body of workmen to try by combination to get more than they are now
getting, although they do it at the expense of their fellows, and to that end
to strengthen their union by the boycott and the strike."
6so TRADE UNIONISM AND LABOR PROBLEMS
The Kansas statute deprived employers of a liberty which they
were allowed by common law. But the Constitution does not un-
qualifiedly forbid the taking of liberty. It forbids it only when the
taking is without due process of law. And the meaning of due proc-
ess is not hinted at. It has been left for the courts to work out. In
so far as the clause has become a criterion of the validity of legis-
lative objects, the issue is always what constitutes an adequate justi-
fication for the taking in question. It is not logic nor the language
of the Constitution which declares that the promotion of the liberty
of the laborer to be a member of a union is not a legitimate legisla-
tive object. It is a judgment, conscious or unconscious; on a ques-
tion of policy. The issue in the Coppage case was one of policy,
and all the competing interpretations of the terms "liberty" and
"equality" cannot disguise the fact.
In deciding constitutional questions which turn on issues of
policy, courts are under a recognized duty to exclude, so far as is
humanly possible, their personal preferences and aversions and to
sustain a statute unless they find it clearly condemned by the
Constitution. It is idle to say that courts never substitute their
views of policy for those of the legislature, for minorities have too
often charged majorities with such substitution. But it is to be
assumed that such majorities firmly believe their views of policy em-
bedded in the Constitution and drawn therefrom. The assumption
is made easier by the fact that not a few of us identify our ideas
of what is good and fair with something greater than ourselves. The
identification is usually incapable of rigorous proof. And so it is
with the determination of many constitutional questions by the Su-
preme Court. The instrument appealed to for an answer to the par-
ticular question is silent thereon. The policy which the judges refer
to the Constitution is connected therewith only by inference oi' con-
jecture. And from the processes of judicial inference it is often
difficult for the judge to exclude his individual predilections.
The inadequacy of the reasoning in many constitutional opinions,
to which Mr. Justice Holmes refers, drives those who seek to under-
stand the actual working of our insritutions of government to look
beyond that reasoning. The explanation of the decisions not infre-
quently depends in part upon the social philosophy of the judges
and in part upon their psychology. Some judges succeed fairly
COLLECTIVE BARGAINING 651
easily in disregarding their personal views of policy and in sustaining
statutes for which as legislators they would not have voted. Others
find the task more difficult, possibly because their predilections are
stronger, possibly because they are less conscious of the considera-
tions that press to play a part in their decisions. Difficult as it is
to tell just what weight these factors have in the development of
our constitutional law, it is impossible to exclude them entirely. We
know pretty clearly the contrast between Marshall and Taney. On
some important questions it is not difficult to prophesy accurately
in advance how the last three judges appointed to the bench will
align themselves. With others the task is more difficult. But the
fact that considerations which may influence decisions elude discovery
does not negative their presence or their power. Whenever judicial
opinions must be adjudged logically bankrupt, and the bankruptcy
is recognized by dissenting colleagues, we may feel insecure in dis-
missing as unimportant the relation between the social outlook of
legislators and the social outlook of judges.
Ill
The majority opinions in the Adair case and the Coppage case
set forth clear and definite ideas of liberty and of equality. It is of
the essence of the liberty of employers that they be free to accept
or reject employees for any reason they please. It is of the essence
of the liberty of employees that they be free to join unions or to
keep aloof from them. Equal freedom for employers and for em-
ployees is the watchword of the opinions. This freedom, however, is
not freedom from economic pressure. It is freedom from legal re-
straint. Unions are lawful organizations, like churches, political
parties, and the National Guard. But they are not entitled to the
aid of the law in their efforts to increase their numbers. They must
make their own way. But this they must be free to do, so far as
the law is concerned, unless they adopt obnoxious methods. Leaving
aside the question of methods, equality of legal right between em-
ployers and employed means the noninterference of the law in their
struggles over collective bargaining. And this principle of equality
of noninterference is so sacred that legislation cannot trespass upon
it without running afoul of the restrictions set by due process.
6.52 TRADE UNIONISM AND LABOR PROBLEMS
From these views of policy which permeate the majority opinions
in the two cases thus far considered we turn to the case of Hitchman
Coal and Coke Company v. Mitchell} The complainant ran a
closed nonunion mine. Each employee was engaged under circum-
stances which the majority opinion states as follows :
Mr. Pickett, the mine superintendent, had charge of employing
the men, then and afterwards, and to each one who applied for em-
ployment he explained the conditions, which were that while the
company paid the wages demanded by the union and as much as
anybody else, the mine was run nonunion and would continue so to
run ; that the company would not recognize the United Mine
Workers of America ; that if any man wanted to become a member
of that union he was at liberty to do so ; but he could not be a mem-
ber of it and remain in the employ of the Hitchman Company ; that
if he worked for the company he would have to work as a nonunion
man. To this each man employed gave his assent, understanding
that while he worked for the company he must keep out of the union.
While this arrangement was in force officers of the U. M.W. A.
visited the employees and solicited them to agree to join the union
and to keep secret the fact of their so agreeing until such time as
enough had agreed so that the officers of the union were ready to
have the employer informed. Against these acts of solicitation an
injunction was granted by the district court. After being reversed
by the court of appeals, the decree of the district court was sustained
by the Supreme Court,^ with the exception of that part which re-
strained picketing and acts of violence. The exception was due to
the fact that neither of these forms of interference had been
attempted.
The injunction did not specifically forbid the defendants to per-
suade employees to promise to join the union and to keep the
promise a secret. One important clause enjoined the defendants
from attempting "to bring about the breaking by plaintiff's em-
ployees ... of their contracts of service, known to the defendants
124S U.S. 232 (1917).
2 The bill was filed October 24, 1907, and a temporary injunction granted.
This was made final on January 18, 1913. The decree of the district court
was reversed by the circuit court of appeals on June i, 1914. A writ of cer-
tiorari was allowed by the Supreme Court, where the case was argued in
March, 1916, reargued in December of that year, and decided a year later on
December 10, 1917.
COLLECTIVE BARGAINING 653
to exist, and especially from . . . enticing such employees ... to
leave plaintiff's service without plaintiff's consent." This is a strange
conjunction. The employees could break their contracts only by not
leaving plaintiff's employ after affiliating with the union. If they
joined they were to depart, not only with plaintiff's consent but by its
express requirement. They could not both break their contracts
and leave without the plaintiff's consent.'^
In so far as the injunction relates to enticing employees to break
their contracts, it was not justified by the evidence unless the em-
ployees had agreed in form or in substance not to give secret
promises to join the union. All that they had agreed to explicitly
was to keep out of the union while they worked for the Company.
Mr. Justice Brandeis says for the minority :
Until an employee actually joined the union he was not, under
the contract, called upon to leave plaintiff's employ. There conse-
quently would be no breach of contract until the employee both
joined the union and failed to withdraw from plaintiff's employ.
There was no evidence that any employee was persuaded to do that
or that such a course was contemplated.
The majority do not seem to question the interpretation put upon
the contract by the minority. But they insist that as thus inter-
preted it had been broken at defendants' solicitation. "In a court
of equity ... to induce men to agree to join is but a mode of in-
ducing them to join." Those who agreed to join "were for all practi-
cal purposes, and therefore in the sight of equity, already members
of the union, and it needed no formal ritual or taking of an oath
to constitute them such." Thus a verbal understanding between the
superintendent and each employee that "if a man wanted to become
a member of that union he was at liberty to do so, but he could not
^This is plain not only from the evidence as to the understanding at the
time of hiring but also from what actually happened at the Glendale mine, a
concern owned by the same stockholders as the Hitchman and managed by
Pickett,. the superintendent also of the Hitchman. To quote from the majority
opinion: "Pickett, the mine superintendent, had learned of only five men at the
Glendale who were inclined to join Hughes's movement; but when these were
asked to remain outside of the mine for a talk, fifteen other men waited with
them, and upon being reminded that while the Company would not try to
prevent them from becoming members of the union, they could not be mem-
bers and at the same time work for the Glendale Company, they all accepted
this as equivalent to a notice of discharge."
6S4 TRADE UNIONISM AND LABOR PROBLEMS
be a member of it and remain in the employ of the Hitchman Com-
pany" is broken when an employee gives to a stranger a legally un-
enforceable promise to join the union.
It may be doubted whether any such interpretation would have
been given to the contract had the question of its meaning arisen
in a dispute which involved only a single employee. What the
plaintiff desired was to prevent its men from acting in concert. It
had stipulated against one method of acting in concert, but had failed
to cover all the possibilities. It is saved from its oversight by the
decision of the majority as to what constituted a breach. But the
decision on this point, if unwarranted, is material only to the par-
ticular litigation. The contract which the majority inferred for the
plaintiff may be expressly made by other employers. They will then
be protected by the Supreme Court against the kind of interference
with their enjoyment of those contracts which the defendants in the
Hitchman case ventured upon. We are more interested in the rule
of law for which the Hitchman case stands than in the question
whether it was correctly applied to the particular state of facts be-
fore the Court.
In order to know what this rule of law is, we must examine more
fully the enterprise of the defendants. They were seeking not only
to get plaintiff's employees to join their union but also to unionize
the plaintiff's mine. This is not contested by the minority. What is
meant by "unionizing the mine" is thus set forth in the dissenting
opinion of Mr. Justice Brandeis:
The operator by the union agreement binds himself: (i) to em-
ploy only members of the union ; (2) to negotiate with union officers
instead of employees individually the scale of wages and the hours
of work; (3) to treat with the duly constituted representatives of
the union to settle disputes concerning the discharge of men and
other controversies arising out of the employment.
The demand for such an agreement was to be made as soon as
enough of plaintiff's employees had agreed to join the union to
make it likely that the demand would meet with success. For such
success collective action was important. To secure collective action
defendants sought to conceal from plaintiff the number and names
of the employees who indicated a willingness to join with them until
they had won over enough men to "crack off."
COLLECTIVE BARGAINING 655
This element of secrecy is made so much of in the opinion of the
majority of the Court that a lawyeriike attitude towards the decision
cannot regard it as a precedent on any situation where the element
of secrecy is lacking. It was the concealment of the promise to
join the union that made it possible for the majority to insist that
the defendants were inducing the employees to break their contracts
by continuing to work after they were really, though not formally,
members of the union. And the concealment is also regarded as
negativing a possible justification for the acts of the defendants.
Mr. Justice Pitney refers to it as follows:
There is no reason to doubt that if defendants had been actuated
by a genuine desire to increase the membership of the union without
unnecessary injury to the known rights of the plaintiff, they would
have permitted their proselytes to withdraw from plaintiff's employ
when and as they became affiliated with the union — as their contract
of employment required them to do — and that in this event plaintiff
would have been able to secure an adequate supply of nonunion men
to take their places. It was with knowledge of this, and because of
it, that defendants, through Hughes as their agent, caused the new
members to remain at work in plaintiff's mine until a sufficient
number of men should be persuaded to join so as to bring about a
strike and render it difficult if not practically impossible for plain-
tiff to continue to exercise its undoubted legal and constitutional
right to run its mine " nonunion."
It was one thing for plaintiff to find, from time to time, compara-
tively small numbers of men to take vacant places in a going mine,
another and a much more difficult thing to find a complete gang of
new men to start up a mine shut down by a strike, when there might
be reasonable apprehension of violence at the hands of the strikers
and their sympathizers.
Mr. Justice Pitney here gives countenance to the inference that he
would have deemed it proper for the defendants to ask plaintiff's
employees one by one to join, or to agree to join, the union, and
then immediately to notify plaintiff and quit work, as their con-
tracts bound them to do. This would not involve a strike, but merely
the ending of the employment of the men one by one at the com-
pulsion of the employer. The issue of the struggle would then depend
upon the rapidity with which individuals could be secured for the
union and the rapidity with which the employer could fill their
places. But the situation in the case at bar was different. There
6s6 TRADE UNIONISM AND LABOR PROBLEMS
was an intention to bring about a strike, so called/ even if plaintiff
should desire to retain the men who joined the union. There was
what the majority regarded as an enticement to a breach of con-
tract. It was with such a situation that the Court found it had to
deal. To that situation its opinion and its judgment should be con-
fined. This is not only required by sound lawyership but is also
supported by a paragraph in which Mr. Justice Pitney sums up
the conclusions reached :
Upon all the facts, we are constrained to hold that the purpose
entertained by the defendants to bring about a strike at plaintiff's
mine in order to compel plaintiff, through fear of financial loss, to
consent to the unionization of its mine as the lesser evil, was an un-
lawful purpose, and that the methods resorted to by Hughes — the
inducing of employees to unite with the union in an effort to sub-
vert the system of employment at the mine by concerted breaches of
the contracts of employment known to be in force there, not to
mention misrepresentation, deceptive statements, and threats of
pecuniary loss communicated by Hughes to the men — were unlawful
and malicious methods, and not to be justified as a fair exercise of
the right to increase the membership of the union.
The decision is thus made dependent "upon all the facts," includ-
ing the threat of a strike and the enticement to breaches of contract.
The majority, in the passage quoted, imply that other acts of defend-
ants might be "a fair exercise of the right to increase the membership
of the union." Earlier in the opinion Mr. Justice Pitney refers to
^Mr. Justice Brandeis also speaks of the intention to have the men "join
the union together and strike — unless plaintiff consented to unionize the mine."
But the Company, according to its professions, was to insist that the men leave
if they joined the union. On the case as presented by the plaintiff no strike
would be necessary, or possible. The original employment at will would be ended
by its own terms. The status quo ante would then be resumed. There would be
no subsisting contractual relation between the employer and the members ot
the union. The issue would then relate to what kind of a new bargain would
evolve out of the exercise of the respective liberties of employer and men.
There might be a collective refusal on the part of the men to enter into a new
agreement which did not include unionizing the mine. In practical effect this
would not differ from a collective abandonment of employment against the
wishes of the employer. But the word "strike" has a false color when used
in this connection. The plaintiff concedes that the men are free to join the
union at any time, but insists that if they do they must quit. If after that
there is a deadlock, it is quite as fair to call the situation a lockout as to call
it a strike. To call it a strike seems inconsistent with plaintiff's professed
conception of the arrangement originally entered into.
COLLECTIVE BARGAINING 657
"the right of workingmen to form unions, and to enlarge their mem-
bership by inviting other workingmen to join them" and says:
"This right is freely conceded, provided the objects of the union
be proper and legitimate, which we assume to be trile, in a general
sense, with respect to the union here in question." But then he adds :
The cardinal error of defendants' position lies in the assumption
that the right is so absolute that it may be exercised under any
circumstances and without any qualification ; whereas in truth, like
other rights that exist in civilized society, it must always be exercised
with reasonable regard for the conflicting rights of others.
Here we have a recognition that the "rights" of employers and
the "rights" of laborers conflict. The successful exercise of the
"right" of members of the union to increase their numbers will inter-
fere pro tanto with the successful exercise of the "right" of em-
ployers to run their mines nonunion. Yet both rights exist and are
declared to be entitled to an equality of legal protection. Plainly,
therefore, the majority give no satisfactory reason for their inter-
ference with the "right" of the defendants by declaring that the
defendants were interfering with the "right" of thfe plaintiff. The
defendants could exercise their right with respect to plaintiff's em-
ployees only by interfering with the conflicting right of the plaintiff.
We may then dismiss as merely prefatory the numerous statements
of Mr. Justice Pitney with respect to the right of the plaintiff to
exclude union men from its employ, and to the interference with
that right by the defendants. These statements have been subjected
to a searching and illuminating analysis by Professor Walter W.
Cook.^ By the use of a somewhat elaborate verbal technic, which
gives different terms to the different varieties of legal rights,
Mr. Cook shows how Mr. Justice Pitney uses "right" now in one
sense and now in another, thus unconsciously asserting a new propo-
sition, and one as yet unproved, under the form of merely reiterating
somethuig firmly established. But in spite of these lapses in the
argumentation the majority opinion, by entering upon the question
whether defendants' interference with plaintiff's interests was justi-
iied, reaches the nub of the controversy.
1" Privileges of Labor Unions in the Struggle for Life," Yale Law Journal,
Vol. XXVII (April, 1918), p. 779-
6s8 TRADE UNIONISM AND LABOR PROBLEMS
The minority concede that the defendant must show justification.
They "were within their rights," says Mr. Justice Brandeis, "if, and
only if, their interference with the relation of plaintiff to its em-
ployees was for justifiable cause." And the justification is then
stated as follows:
The purpose of interfering was confessedly in order to strengthen
the union, in the belief that thereby the condition of workmen engaged
in mining would be improved; the bargaining power of the indi-
vidual workingman was to be strengthened by collective bargaining ;
and collective bargaining was to be insured by obtaining the union
agreement. It should not, at this day, be doubted that to induce
workingmen to leave or not to enter an employment, in order to
advance such a purpose, is justifiable when the workmen are not
bound by contract to remain in such employment.
But the majority insist that the end aimed at was not a justifica-
tion for the interference. The defendants' activities, says Mr. Jus-
tice Pitney, "cannot be treated as a bona fide effort to enlarge the
membership of the union." The reason given is in substance that
it was an effort to do something more than to enlarge the union. It
was an attempt to unionize the mine after the union was enlarged.
But Mr. Justice Pitney says that "there is no evidence to show,
nor can it be inferred, that defendants intended or desired to have
the men at the mines join the union, unless they could organize the
mines." Of course if they gained this end they would enlarge the
union. And the enlargement of the imion is always sought for some
more concrete advantage than mere growth in numbers. The reason
why there is any truth to the statement that the defendants did not
wish plaintiff's employees to join the union unless the mine could be
thereby unionized is that such unionization was deemed necessary in
order to safeguard the interests of the men after they were in the
union and to make it possible for them to remain in the union.
But Mr. Justice Pitney's analysis of the defendants' purposes, how-
ever faulty, indicates where he draws the line as to what constitutes
an adequate justification. Union organizers can get men to join the
union if they do not thereby interfere with the employer's "un-
doubted legal and constitutional right to run its mine "nonunion."'
They may increase the union if they do it in such a way that an
employer can readily continue to get nonunion laborers. But they
COLLECTIVE BARGAINING 659
must not attempt to "alienate a sufficient number of the men to
shut down the mine, to the end that the fear of losses through stop-
page of operations might coerce plaintiff into 'recognizing the
union' at the cost of its own independence." The purpose of organ-
izing the mine is no justification. Where "unionizing the miners is
but a step in the process of unionizing the mine" the plaintiff "is
as much entitled to prevent the first step as the second, so far as its
own employees are concerned, and to be protected against irrepara-
ble injury resulting from either." And the purpose of securing col-
lective bargaining is not a justification for disturbing an employer
unless the employer is willing to bargain that way. "Whatever
may be the advantages of " collective bargaining,' it is not bargaining
at all, in any just sense, unless it is voluntary on both sides."
This irenic conception of the way buyers and sellers should bar-
gain bespeaks a noble ideal, but one not yet fully realized in the
coal regions. Collective bargaining is seldom, if ever, brought about
because employers desire it above all other forms. It is brought
about because employers prefer it to making no bargains at all. It is
interesting that it is Mr. Justice Pitney who refers to the acts of the
defendants as the "employment of coercive measures to secure a
closed union shop through a collective agreement with the union."
For it was Mr. Justice Pitney who reminded us in the Coppage case
that it was not "coercion" to propose certain terms of employment
which one has the right to propose. Now it is the minority who have
to tell us that economic pressure is not coercion in a legal sense. As
Mr. Justice Brandeis puts it :
The employer is free either to accept the agreement or the disad-
vantage. Indeed, the plaintiff's whole case is rested upon agree-
ments secured under similar pressure of economic necessity or
disadvantage. If it is coercion to threaten to strike unless plaintiff
consents to a closed union shop, it is coercion also to threaten not
to give one employment unless the applicant will consent to a closed
nonunion shop. The employer may sign the union agreement for
fear that labor may not be otherwise obtainable ; the workman may
sign the individual agreement, for fear that employment may not be
otherwise obtainable. But such fear does not imply coercion in a
legal sense.
But Mr. Justice Pitney takes a more idyllic view of the original
nonunion agreement at the Hitchman. He speaks of the fact that
66o TRADE UNIONISM AND LABOR PROBLEMS
the defendants had plain notice "that the observance of this agree-
ment was of great importance and value both to the plaintiff and to
its men who had voluntarily made the agreement and desired to
continue working under it." And again he says that the plaintiff
"established the mine on a nonunion basis, with the unanimous ap-
proval of its employees — in fact upon their suggestion — and under
a mutual agreement assented to by every employee, that plaintiff
would continue to run its mine nonunion. . . ." This "suggestion"
of the employees is earlier detailed by Mr. Justice Pitney as follows :
About the first of June a self-appointed committee of employees
called upon plaintiff's president, stated in substance that they could
not remain longer on strike because they were not receiving benefits
from the union, and asked upon' what terms they could return to
work. They were told that they could come back, but not as mem-
bers of the United Mine Workers of America; that thenceforward
the mine would be run on a nonunion basis, and the company would
deal with each man individually. They assented to this and returned
to work on a nonunion basis.
A further side light is thrown on the situation by the account in
the majority opinion of the activities of the union organizer: "He
prophesied, in such a way that ignorant, foreign-born miners, such as
he was addressing, naturally might believe that he was speaking with
knowledge. . . ." Ignorant and gullible were the men who volun-
tarily made the nonunion agreement with their employer and desired
to continue working under it.
Closely connected with Mr. Justice Pitney's change of view as to
what constitutes "coercion" is his shift with respect to "independ-
ence." In the Hitchman case he speaks of the defendants' action as
being directed "to the end that the fear of losses through stoppage
of operations might coerce plaintiff into 'recognizing the union' at
the cost of its own independence." But in the Coppage case he did
not recognize any loss of independence by the laborers who had to
agree to refrain from union affiliations in order to get work. The
employee was said to be "free to decline employment on those terms,
just as the employer may decline to offer employment on any other ;
for "it takes two to make a bargain.'" As to loss of independence
after making the bargain, he said : " Freedom of contract, from the
very nature of the thing, can be enjoyed only by being exercised ;
COLLECTIVE BARGAINING 66 1
and each particular exercise of it involves making an engagement
which, if fulfilled, prevents for the time any inconsistent course of
conduct." In the Hitchman case it is not to Mr. Justice Pitney but
to Mr. Justice Brandeis that we must look for this point of view.
In the dissenting opinion we find the following :
It is urged that a union agreement curtails the liberty of the oper-
ator. Every agreement curtails the liberty of those who enter into it.
The test of legality is not whether an agreement curtails liberty, but
whether the parties have agreed upon something which the law pro-
hibits or declares otherwise to be inconsistent with the public welfare.
Then follows the enumeration of the details of the union agreement
quoted on page 654 supra, and the comment :
These are the chief features of a "unionizing" by which the em-
ployer's liberty is curtailed. Each of them is legal. To obtain any
of them or all of them men may lawfully strive and even strike.
And if the union may legally strike to obtain each of the things for
which the agreement provides, why may it not strike or use equiva-
lent economic pressure to secure an agreement to provide them?
To this Mr. Justice Pitney gives no answer except to reiterate
the "legal right" of the plaintiff to run its mine nonunion, to make
agreements to that end with its employees, and "to be protected
in the enjoyment of the resulting status, as in any other legal right."
This status is deemed so sacred that the purpose of the union leaders
to interfere with it is in itself unlawful. Unions may strive to
increase their numbers, but they must not in so doing strive to union-
ize any mine in which employees have ageed to quit if they join the
union. After quoting a familiar statement from the Mogul Steamship
Case^ as to the unlawfulness of inflicting intentional damage without
just cause or excuse, Mr. Justice Pitney adds :
And the intentional infliction of such damage upon another, with-
out justification or excuse, is malicious in law. . . . And we cannot
deem the proffered excuse to be a "just cause or excuse" where it is
based, as in this case, upon an assertion of conflicting rights that are
sought to be attained by unfair methods, and for the very purpose
of interfering with plaintiff's rights, of which defendants have full
notice.
123 Q. B. Div. 613.
662 TRADE UNIONISM AND LABOR PROBLEMS
Leaving aside the question of methods/ this is to say that plain-
tiff's purpose is its right, and therefore defendants' contrary purpose
cannot be their right.
Defendants' purpose seems to be regarded as illegal, no matter
by what methods it is pursued. Much of the assertion in the
majority opinion leads to this inference, and the inference is reen-
forced by one of the clauses of the injunction. As paraphrased by
Mr. Justice Pitney, it restrained defendants from "knowingly and
willfully enticing plaintiff's employees, present or future, to leave
plaintiff's service on the ground that plaintiff does not recognize the
United Mine Workers of America or runs a nonunion mine, etc."
In this clause there is no reference to enticing breaches of contract.
So far as the terms above quoted disclose, defendants would be sent
to jail if they persuaded any of plaintiff's employees to join the union.
For anyone who joined had to leave plaintiff's service because, plain-
tiff ran a nonunion mine. Enticing him to join the union is enticing
him to leave because plaintiff runs a nonunion mine. Such leaving
would, it is true, be by the consent and the compulsion of the plain-
tiff, but the clause now under consideration is not qualified by the
words "without plaintiff's consent."
^The minority insist that the methods of defendants were entirely fair. The
organizer had informal talks and some quietly conducted public meetings in which
he pointed out that though "the Company was then paying them according to
the union scale, there would be nothing to prevent a later reduction of wages
unless the men united." He also pointed out that if the men lost their present
jobs, "membership in the union was requisite to obtaining employment in the
union mines of the neighboring states." The majority, however, insist that he
used "abusive language" respecting the superintendent and two of the miners
who evidently were opposed to the union, and that he represented the possible
reduction of wages so that the ignorant miners might naturally believe he was
speaking with knowledge. They also refer to a conversation in which he
represented that Koch, the general manager, "had nothing against having the
place organized again."
The really important dispute as to methods is whether they involved breach
of contract. The minority do not make clear whether, if they agreed with the
view that continuing work after the secret agreement constituted a breach of
contract, they would sanction the injunction on that point. They concede that
mere persuasion to leave the employment requires justification, and declare that
plaintiff's individual contracts add nothing to its rights so long as the employ-
ment is terminable at will. They hold, however, that the object of strengthen-
ing the union justified the persuasion. They imply that it would not justify
inducing breach of a contract to serve for a definite term. But as to other
possible contracts they are silent.
COLLECTIVE BARGAINING 663
It is probable, however, that Mr. Justice Pitney's paraphrase of
this clause of the injunction is incomplete. The reference to it in
the minority opinion contains the qualification : " for the purpose of
unionizing plaintiff's mine without plaintiff's consent." But even
this qualification would not make licit an "enticement" to join the
union which was part of a plan to unionize the mine. If defendants
had such a plan, they would be restrained from asking plaintiff's
employees one by one to join the union, even though they joined
openly and withdrew from work at once as the employer desired.
If union officials wish to start a membership campaign among miners
working under a nonunion agreement, they must be without any
thought of later unionizing the mine. For to seek to unionize a mine
run under a nonunion agreement is to seek to make it impossible for
the mine owner "to exercise his undoubted legal and constitutional
right," and for the very purpose of making it impossible, and there-
fore without just cause or excuse. For it is no justification that the
defendants are seeking to strengthen the union and to secure collec-
tive bargaining, since collective bargaining interferes with the em-
ployer's right to make individual bargains and "is not bargaining
at all in any just sense unless it is voluntary on both sides." It is
"coercion" and an interference with the "independence" of the
employer.
Recognized canons of judicial action require us to limit the author-
ity of the actual decision of the Hitchman case to situations where
there is some element of breach of contract and a threatened strike.
Parts of the majority opinion so limit the decision. But other parts
and some of the terms of the injunction go further. Two inconsistent
threads of thought run through the majority opinion. One would
permit union officials to secure members from men working under a
nonunion agreement if each man announces his new affiliation as
soon as it occurs and leaves the employment as the contract under
which he is working permits and requires. The other would forbid
it if there was evidence of a plan to unionize the mine.
If law, as Mr. Justice Holmes says, is a prophecy of what courts
will do in fact, it is more important to know what a majority of the
Supreme Court think than what they have technically decided. And
it seems pretty clear that at present a majority of the Supreme Court
think that labor unions must take no steps whatever to unionize
664 TRADE UNIONISM AND LABOR PROBLEMS
a nonunion mine, at least where its nonunion character has been pro-
tected by contracts with the employees. In the absence of such an
object they may take steps to get union members from a nonunion
mine provided the employer is apprised of each inch of their prog-
ress. If their success is sufficiently rapid, the employer may find
himself "in a position where he prefers to ask the men to come
back even though they remain in the union. Then arises a new
situation which the Hitchman case does not cover. For it is ex-
plicitly stated in the majority opinion that "the case involves no
question of the rights of employees," and further that the "defen-
dants could not, without agency, set up any rights that employees
might have."
If, therefore, union officials form their plan to unionize a mine
only after it has ceased to be a closed nonunion mine and has be-
come an open one, it would seem that they may carry out their
plan as agents of the union members among the employees. But
the present majority of the Supreme Court is not likely to find such
a situation occurring in the affairs of the United Mine Workers of
America. For they will always have the evidence relied on in the
Hitchman case, which establishes from the proceedings of their an-
nual convention that the U. M. W. A. mean to unionize every mine
they can. Every step to secure members from nonunion mines must
therefore be part of a plan to unionize the mine. Employees who wish
to affiliate with the U. M. W. A. must do so entirely of their own
initiative. But even this initiative will probably be checked by the
type of nonunion agreement which appears in Eagle Glass and Manu-
facturing Company v. Rowe,^ decided the same day as the Hitch-
man case. This required each employee to promise "that if at any
time while so employed he desired to become connected with the
union he would withdraw from the employ of the Company, and that
while in its employ he would not make any effort amongst its em-
ployees to bring about the unionizing of the plant against the Com-
pany's wish." With such an agreement the employees themselves
would be restrained from casting glances at the union in the desire
to get the mine unionized.
Thus it appears that the equal liberty of employer and employed
which is the boast of the law is a personal and individual matter.
124S U.S. 276 (1917).
COLLECTIVE BARGAINING 665
Each laborer when unemployed is as free from legal restraint as to
what bargain he shall make as is each employer. After his bargain
the extent of his freedom depends upon the terms of the bargain.
Though limited, it is self-limited. Freedom has curtailed freedom.
But the freedom curtailed is not that of the individual contractor
alone. By a bargain which leaves himself free to leave the em-
ployment at any time he binds others not to persuade him to leave.
For he has helped to create a status — the status of the closed non-
union shop. He may dissolve the status so far as it concerns him.
But others may not seek to dissolve the status through him. Thus
each laborer holds in his own hands the liberty of other laborers,
which he may bargain away. Much as they may desire to improve
their position by prevailing upon all laborers to act collectively, they
may not approach one who has agreed to leave his employment if he
desires to unite with them. "The right of workingmen to form
unions, and to enlarge their membership by inviting other working-
men to join them" is "freely conceded." But the judges who con-
cede it hold that it cannot be exercised for the purpose of changing a
closed nonunion mine into a closed union mine. To the contention
to the contrary', "it is a sufficient answer, in law,, to repeat that
plaintiff had a legal and constitutional right to exclude union men
from its employ."
This is the law of West Virginia, as declared by the Supreme Court
of the United States in a case where federal jurisdiction obtained by
reason of diversity of citizenship. Mr. Cook, in the article previously
referred to, says that the cases cited by the Supreme Court from
West Virginia and other jurisdictions in support of the inadequacy
of defendants' justification do not establish it. They support the
principle that justification is necessary to excuse one who persuades
employees to leave their employer, but they do not negative the law-
fulness of the excuse offered by the defendants in the case at bar.
Mr. Justice Pitney negatives it only by asserting that defendants'
purpose and alleged justification interfere with plaintiff's right.
This is conceded if the term "right" is properly understood. But
in the same sense of the term the interference was in the exercise of
a conflicting right of the defendants. The mere statement of the con-
flict throws no light on which should prevail, or what adjustment
should be made. That question is plainly one of policy. Congress
666 TRADE UNIONISM AND LABOR PROBLEMS
and the legislatures of at least fourteen states^ have indicated their
views of policy by prohibiting the type of agreement which was the
foundation of the plaintiff's action in the Hitchman case. This policy
the Supreme Court reverses, not only by insisting that the making
of such agreements cannot be inhibited but by declaring that when
made for any mine or mill they end the liberty of organized labor
to seek to organize that establishment.
These competing policies are undoubtedly debatable. It is much
less clear that the judges have satisfactorily debated them. Much,
if not most, of the reasoning given in support of the decisions is
abstract and artificial. "Liberty" and "equality" and "right" seem
often to be terms to conjure with rather than to enlighten. We are
not likely to get a satisfactory solution of the problem of collective
bargaining through the jurisprudence of abstract conceptions. In-
deed, jurisprudence of any kind may play but a pigmy part in the
solution, which seems to be conditioned less on the conclusions of
judicial reasoning than on what a despised and revered writer has
called "that simpler line of expedients which the drift of circum-
stance, being not possessed of a legal mind, has employed in the
sequence of institutional change hitherto." The three decisions under
review do not seem greatly to have delayed the progress of collec-
tive bargaining. They may soon be mainly of philosophical and
antiquarian interest.
Thomas Reed Powell
Columbia University
lA list is given in the margin of Mr. Justice Day's dissenting opinion in the
Coppage case, at page 29.
XL
A NEW PROVINCE FOR LAW AND ORDERS
THE new province is tliat of the relations between employers
and employees. Is it possible for a civilized community so
to regulate these relations as to make the bounds of the industrial
chaos narrower, to add new territory to the domain of order and
law? The war between the profit-maker and the wage-earner is
always with us; and, although not so dramatic or catastrophic as
the present war in Europe, it probably produces in the long run
as much loss and suffering, not only to the actual combatants but
also to the public. Is there no remedy ?
During a brief sojourn in the United States in the summer of
19 14 I had the good fortune to meet many men and women of
broad and generous outlook and of admirable public spirit. They
were anxious to learn what I, as president of the Australian Court
of Conciliation and Arbitration, could tell them of Australian
methods of dealing with labor questions. I propose now, on the
invitation of the editor of this Review, to state briefly the present
position, confining my survey to my own personal experience.
The Australian Federal Constitution of 1900 gave to the Federal
Parliament power to make laws with respect to "conciliation and
arbitration for the prevention and settlement of industrial disputes
extending beyond the limits of any one state." ^ Following the
example of the United States Constitution, the Constitution left
all residuary powers of legislation to the states; and the theory
generally held at the time of our constitutional convention was
that each state should be left to deal with its own labor conditions
as it thought best. But an exception was made, after several
discussions, in favor of labor disputes which pass beyond state
boundaries and cannot be effectually dealt with by the laws of any
one, or more states. Just as bush fires run through the artificial
^From Harvard Law Review, Vol. XXIX (191S), PP- 13-39.
2 Article XXXV, Section 51.
667
668 TRADE UNIONISM AND LABOR PROBLEMS
state lines, just as the rabbits ignore them in pursuit of food, so do,
frequently, industrial disputes.
In pursuance of this power an act was passed December 15, 1904,
constituting a Court for Conciliation, and where conciliation is found
impracticable, arbitration. The arbitration is compulsory in the sense
that an award, if made, binds the parties. The act makes a strike or a
lockout an offense if the dispute is within the ambit of the act — if the
dispute is one that extends beyond the limits of one state. In other
words, the process of conciliation, with arbitration in the background,
is substituted for the rude and barbarous processes of strike and
lockout. Reason is to displace force ; the might of the State is to
enforce peace between industrial combatants as well as between other
combatants ; and all in the interest of the public.
Under the act the Court consists of a president, who must be one
of the justices of the High Court of Australia. The High Court is
modeled on the Supreme Court of the United States, having often to
decide whether acts are constitutional, but it is also a Court of
Appeal from the supreme courts of the states. The first president
of the Court of Conciliation was appointed February 10, 1905,
and on his resignation in September, 1907, I was appointed as his
successor.
The first task that I had to face was not, strictly speaking, con-
ciliation or arbitration. The Federal Parliament imposed certain
excise duties on agricultural implements manufactured, but it pro-
vided for the remission of the duties in the case of goods manu-
factured under conditions, as to the remuneration of labor, which
the president of the Court should certify to be " fair and reasonable."^
The act gave no guidance as to the model or criterion by which
fairness and reasonableness were to be determined. In dealing
with the first employer who applied to me for a certificate I came to
the conclusion that the act was designed for the benefit of employees
and that it was meant to secure for them something which they could
not get by individual bargaining with their employers. If A let B
have the use of his horse on the terms that B give the horse fair and
reasonable treatment, B would have to give the horse proper food
and water, shelter, and rest. I decided, therefore, to adopt a standard
based on "the normal needs of the average employee, regarded as
^ Excise Tariff 1906,
A NEW PROVINCE FOR LAW AND ORDER 669
a human being living in a civilized community." This was to be
the primary test in ascertaining the minimum wage that would be
treated as "fair and reasonable" in the case of unskilled laborers.
At my suggestion many household budgets were stated in evidence,
principally by housekeeping women of the laboring class ; and, after
selecting such of the budgets as were suitable for working out an
average, I found that in Melbourne, the city concerned, the aver-
age necessary expenditure in 1907 on rent, food, and fuel in a
laborer's household of about five persons was £r 12 s. $d. (about
$7.80, taking a dollar as equivalent to 45. 2d.); but that, as these
figures did not cover light, clothes, boots, furniture, utensils, rates, life
insurance, savings, accident or benefit societies, loss of employment,
union pay, books and newspapers, tram or train fares, sewing ma-
chine, mangle, school requisites, amusements and holidays, liquors,
tobacco, sickness or death, religion or charity, I could not certify
that any wages less than 42 s. per week for an unskilled laborer would
be fair and reasonable. Then, in finding the wages which should be
treated as fair and reasonable in the cases of the skilled employees, I
relied mainly on the existing ratios found in the practice of employers.
If, for instance, the sheet-iron worker got ?>s. per day when the
laborer got 6 s., the sheet-iron worker should get, at the least, 9 s.
when the laborer's minimum was raised to 7 5.
In the case referred to, the employer did not raise before me the
point that the act was invalid ; but, having failed in his application
for a certificate, he refused to pay the excise duty, and defended
an action to recover the duty before the High Court on the ground
that the act was invalid ; and he succeeded, by a majority of three
justices to two, on the ground that the act was not really a tax-
ation act at all, but an act to regulate labor conditions, and as
such beyond the competence of the Federal Parliament.^ But the
principles adopted in the case for ascertaining a "fair and reason-
able" minimum wage have survived and are substantially accepted,
I believe universally, in the industrial life of Australia.
In the first true arbitration case — that relating to ship's cooks,
bakers, etc. — the standard of 7 s. per day was attacked by employers,
but I do not think that it has been attacked since, probably because
the cost of living has been rising. The Court announced that it
^King V. Barger, Commonwealth v. McKay, 6 Com. Law Rep. 41 (1908).
670 TRADE UNIONISM AND LABOR PROBLEMS
would ascertain first the necessary living wage for the unskilled
laborer, and then the secondary wage due to skill or other excep-
tional qualifications necessary. Treating marriage as the usual
fate of adult men, a wage which does not allow of the matrimonial
condition and the maintenance of about five persons in a home
would not be treated as a living wage. As for the secondary wage,
it seemed to be the safest course, for an arbitrator not initiated
into the mysteries of the several crafts, to follow the distinctions
in grade between employees as expressed in wages for many
years.
The distinction between the basic or primary or living wage and
the secondary wage attributable to exceptional qualifications neces-
sary for the performance of the function is not fanciful ; it was
forced on the Court by the problems presented and by the facts of
industrial life. Yet it has to be borne in mind that though the
essential natural needs come first, the conventional needs (for ex-
ample, of artisans as distinguished from laborers) become, by usage,
almost equally imperative.^
The following propositions may, I think, be taken to be estab-
lished in the settlement of minimum wages by the Court ; and it is
surprising to find how often, as the principles of the Court's action
come to be understood and appreciated, they guide parties disputing
to friendly collective agreements, without any award made by the
Court.
1. One cannot conceive of industrial peace unless the employee
has secured to him wages sufiicient for the essentials of human
existence.^
2. This, the basic wage, must secure to the employee enough
wherewith to renew his strength and to maintain his home from
day to day.'
3. The basic wage is the same for the employee with no family
as for the employee with a large family. It rests on Walt Whitman's
"divine average," and the employer need not concern himself with
his employee's domestic affairs.
1 Engine Drivers, 7 Com. Arb. 132, 139 (1913).
2Boot Factories, 4 Com. Arb. i, 10 (igio) ; Seamen, s Com. Arb 147 164
(1911).
5 Broken Hill Mine, 3 Com. Arb. i, 20 (1909).
A NEW PROVINCE FOR LAW AND ORDER 671
4. The secondary wage is remuneration for any exceptional gifts
or qualifications/ not of the individual employee, but gifts or quali-
fications necessary for the performance of the functions ; for example,
skill as a tradesman, exceptional heart and physique (as in the case
of a gas stoker),^ exceptional muscular training and power (as in the
case of a shearer),^ exceptional responsibility (for example, for
human life, as in the case of winding or locomotive engine drivers).*
5. The secondary wage, as far as possible, preserves the old mar-
gin between the unskilled laborer and the employee of the skilled
or exceptional class. ^
6. After ascertaining the proper wages, basic and secondary, the
Court considers any evidence adduced to show that the employers
ought not to be asked to pay such wages." It will consider grounds
of finance, of competition with imports, of unfairness to other workers,
of undue increase in prices of the product, of injury to the public, etc.
7. The wages cannot be allowed to depend on the profits made by
the individual employer, but the profits of which the industry is
capable may be taken into account. If the industry is novel, and
those who undertake it have to proceed economically, there may be
a good cause for keeping down wages, but not below the basic wage,
which must be sacrosanct. Above the basic wage bargaining of the
skilled employee may, with caution, be allowed to operate.^
8. The fact that a mine is becoming exhausted or poorer in its
ores is not a ground for prescribing a lower rate than would other-
wise be proper. If shareholders are willing to stake their own money
on a speculation, they should not stake part of the employee's proper
wages also. The Court cannot endanger industrial peace in order
to keep unprofitable mines going.^
^Boot Factories, 4 Com. Arb. i, 10 (1910) ; Postal Electridans, 7 Com. Arb.
5, 10 (1913) ; Builders' Laborers, 7 Com. Arb. 210, 217 (1913).
''Gas Employees, 7 Com. Arb. 58, 71 (1913).
^Shearers, 5 Com. Arb. 48, 79 (1911).
^Engine Drivers, s Com. Arb. 9, 21 (1911).
^McKay, 2 Com. Arb. i, 16 (1907) ; Ship's Cooks, 2 Com. Arb. 55, 6$, 66
(1908).
'Broken Hill Mine, 3 Com. Arb. i, 31 (1909).
''Ibid. 32; Shearers, S Com. Arb. 48, 73 (1911) ; Ship's Officers, 6 Com. Arb.
6, 21 (igi2).
'Broken Hill Mine, supra, 33-34; Engine Drivers, 7 Com. Arb. 132, 139
(1913).
672 TRADE UNIONISM AND LABOR PROBLEMS
9. The Court does not increase the minimum on the ground of
affluence of the employer. It is not affected by the fact that one
of the employers can, by skillful management, by enterprise, or by
good fortune, make very large profits.^
10. The minimum rate must be based on the highest function that
the employee may be called on to exercise. The employer must not
give a plumber laborer's work and pay him laborer's wages if he has
also to do plumbing.^
11. In finding the proper minimum rate the Court tries to find
what would be proper for an employee of average capacity called
upon to do work of the class required. If the employer desires to
secure the services of an exceptional workman, he is free to do so.
The payment of higher rates is left to the play of bargaining.^
12. The Court does not attempt to discriminate in wages on the
ground of comparative laboriousness. Discrimination on such a
ground is neither safe nor sound. The Court declined to give an
extra rate to hodmen if they carry beyond a certain height.*
13. The Court will not discriminate in wages as between the
several states so as to interfere with the freedom of trade between
the states provided by the Constitution.''
14. The Court will not keep down wages on steamers so as to
enable them to beat state railways in competition or to help one
competitor against another."
15. The Court accepts and follows the usual practice of making
rates for casual employment higher than the corresponding rates for
continuous employment.'
16. The Court, in obedience to the act, provides exceptions to
the minimum rate in the case of aged, slow, or infirm workers, but
the exceptional cases must be disclosed to the representative of the
union and be well safeguarded.*
iSeamen, s Com. Arb. 147, 164 (1911); Gas Employees, 7 Com. Arb. 58,
72 (1913).
2 Postal Electricians, 7 Com. Arb. j, 8-9 (1913).
"Ship's Stewards, 4 Com. Arb. 61, 63, 68 (1910) ; Engine Drivers, s Com.
Arb. 9, IS (1911); Shearers, 5 Com. Arb. 48, 91 (1911); Builders' Laborers,
7 Com. Arb. 210, 223 (1913).
^Ibid. 231.
= Constitution, Section 92; Boot Factories, 4 Com. Arb. i, 13 (1910).
8 Ship's Of&cers, 6 Com. Arb. 6, 22 (1912).
'Builders' Laborers, 7 Com. Arb. 210, 218 (1913).
sAct, Section 40; Boot Factories, 4 Com. Arb. 1, 24 (1910).
A NEW PROVINCE FOR LAW AND ORDER 673
17. But the Court will not provide exceptions to the minimum rate
for "improvers," men paid more than boys and less than journey-
men, men who are used to beat down the claims of competent
journeymen and are thus a perpetual menace to the peace of the
community.^
18. The Court regards the old system of apprenticeship as un-
suitable for factories under modern conditions, and it objects to
fixing a rigid proportion of apprentices to journeymen without regard
to the circumstances ; for example, the character of the output of each
factory. But if conditions of apprenticeship are in dispute, the Court
will, especially if both sides wish it, and for the sake of peace as well
as efficiency, make regulations on the subject. The proper method,
however, seems to be, in boot factories, to coordinate the work of the
factories with the work of the technical schools.^
19. The Court will not prescribe extra wages to compensate for
unnecessary risks to the life or health of the employee or unnecessary
dirt. No employer is entitled to purchase by wages the right to
endanger life or to treat men as pigs.^
20. The Court gives weight to existing conventions, usages, prej-
udices, exceptional obligations and expenses of the employee-; for
instance, that masters and officers are required to keep up a certain
appearance, and that stewards must provide themselves with uniform
and laundry.*
21. Where it is established that there is a marked difference in the
cost of living between one locality and another the difference will, so
far as possible, be reflected in the minimum wage.^
22. But where, as in the case of the wharf laborers at ports, all
the employees and nearly all the employers desire that there should
be no differentiation the Court bases the minimum wage on the mean
Australian cost of living.®
i/6a. 16.
^Boot Factories, 4 Com. Arb. i, ig, 20 (igio).
^Ship's Cooks, 2 Com. Arb. 55, sg, 60 (igo8) ; Seamen, s Com. Arb. 147, 164
(1911).
*Ship's Officers, 4 Com. Arb. 89, g3, gs (igio) ; Ship's Stewards, 4 Com. Arb.
61, 66 (igio).
^Brolcen Hill Mine, 3 Com. Arb. i, 28-30 (igog') ; Engine Drivers, S Com.
Arb. g, 23 (igii); 7 Com. Arb. 132, 141 (igi3) ; Fruit-growers, 6 Com. Arb.
61, 69 (1912) ; Gas Employees, 7 Com. Arb. 58, 70-74 (igi3); Builders' Laborers,
7 Com. Arb. 210, 221 (1913).
^Wharf Laborers, 8 Com. Arb. (1914) .
674 TRADE UNIONISM AND LABOR PROBLEMS
23. In cases such as that of ship's stewards, where the employees
usually receive from passengers "tips" (or "bunce"), the average
amount of the tips must be taken into account in finding whether the
employee receives a living wage. But the minimum wage will be
raised to its proper level if the practice of tipping can be stopped.^
24. In cases where employees are "kept," found in food and shelter
by the employer, the value of the "keep" is allowed in reduction of
the wages awarded. At a time when the keep of single men, such
as laborers, cost in lodgings usually i^s. per week the Court reduced
the wages by 10 i. only. For the 15 5. at the family home would go
further than it would go for board and lodging outside the home ; and
the employer who feeds a large number of men can buy the necessary
commodities in large quantities and on advantageous terms. The
io.y. per week seemed to represent fairly the amount of expenditure
of which the home was relieved by the absence of the man.^
25. The principle of the living wage has been applied to women,
but with a difference, as women are not usually legally responsible
for the maintenance of a family. A woman's minimum is based on
the average cost of her own living to one who supports herself by her
own exertions. A woman or girl with a comfortable home cannot
be left to underbid in wages other women or girls who are less
fortunate.'
26. But in an occupation in which men as well as women are
employed the minimum is based on a man's cost of living. If the
occupation is that of a blacksmith, the minimum isi a man's mini-
mum; if the occupation is that of a milliner, the minimum is a
woman's minimum; if the occupation is that of fruit picking, as
both men and women are employed, the minimum must be a man's
minimum.*
27. As regards hours of work, when disputed, the Court usually
adheres to the general Australian standard of forty-eight hours;
generally eight and three-quarters hours on five days, four and one-
quarter hours on Saturday. But in exceptional cases the Court
has reduced the hours: in one case because of the nerve-racking
1 Ship's Stewards, 4 Com. Arb. 61, 64 (1910).
2 Ship's Cooks, 2 Com. Arb. S5, 62 (1908) ; Ship's Stewards, 4 Com. Arb. 61,
63 (1910).
s Fruit-growers, 6 Com. Arb. 61, 71 (1912).
*lbid. 72.
A NEW PROVINCE FOR LAW AND ORDER 675
:haracter of the occupation;^ in another case, that of builders'
laborers, because the men have to " follow their job," spending much
Df their own time in traveling.^
28. The Court has conceded the eight hours' day, at sea as well as
in port, to deck hands on ships,^ to officers on ships,* to marine
engineers.^ But there are sundry necessary exceptions, and the
Master retains the absolute right to call on any man in emergencies
involving the safety of the ship ; and for other purposes he may call
on any man, paying extra rates for the overtime. The hours of navi-
gating officers were sometimes shocking and involved danger to ship,
cargo, and passengers.'^
29. In certain exceptional cases the Court has granted a right to
leave of absence for two or three weeks on full pay to employees after
a certain length of continuous service; not, of course, to casual or
temporary employees.^
30. The Court refuses to dictate to employers what work they
should carry on, or how ; or what functionaries they should employ,
or what functions for each employee ; or what tests should be applied
to candidates for employment.'
31. The Court leaves every employer free to carry on the business
on his own system, so long as he does not perpetuate industrial trouble
or endanger industrial peace ; free to choose his employees on their
merits and according to his exigencies ; free to make use of new
machines, of improved methods, of financial advantages, of advan-
tages of locality, of superior knowledge; free to put the utmost
pressure on anything and everything except human life."
32. As regards complaints of disagreeable or onerous conditions,
the Court treats as fundamental the consideration that the work of
'Postal Electricians, 7 Com. Arb. 5, 15-16 (1913).
^Builders' Laborers, 7 Com. Arb. 210, 228-229 (1913).
^Seamen, 5 Com. Arb. 147, 159, 160 (1911).
*Ship's Of&cers, 4 Com. Arb. 89, 99 (1910).
^Marine Engineers, 6 Com. Arb. 95, 107 (1912).
'Ship's Officers, 6 Com. Arb. 6, 16, 17 (1912).
''Ibid, ij, 25; 7 Com. Arb. 92, 104 (1913) ; Postal Electricians, 7 Com. Arb.
S> 17 (1913).
'Broken Hill Mine, 3 Com. Arb. i, 36 (1909) ; Postal Electricians, 7 Com.
Arb. 5, 7, 8, 13, 18, J9 (1913)-
'Boot Factories, 4 Com. Arb. i, 18 (1910) ; Shearers, 5 Com. Arb. 48, 100
(1911); Fruit-growers, 6 Com. Arb. 61, 75 (1912) ; Gas Employees, 7 Com.
Arb. £8, 77 (1913).
676 TRADE UNIONISM AND LABOR PROBLEMS
the ship, factory, mine, etc. must be done, a consideration next in
order to that of the essential needs of human life. An order will
not be made that is inconsistent with the effective management of
the undertaking.^
33. On the same principle the Court steadily refuses to make
orders which would miUtate against the public interest or conven-
ience. It has refused to order prohibitive overtime rates for leaving
port on Sundays ; 2 it has refused to forbid the employment of casuals
or to forbid "broken time" in tramway services. Casuals or "broken
time," or both, are necessary to meet the extra traffic at certain
times of the day.^
These are some of the principles of action adopted by the Court.
But, it may be asked, what about piecework ? How does the Court
fix piecework rates? The first great case in which piecework rates
were directly involved was that of the Shearers.* At the time of
the arbitration wool furnished nearly forty per cent of the exports of
Australia, nearly £29,000,000 per annum, in addition to the wool
used in Australia. In that case the Court prescribed the piecework
rates on a time-work basis — found the piecework rates which would
enable an average shearer to earn such wages per week as would be
the just minimum for a man with the qualifications of a shearer if
he were paid by time. Having found that the shearer should, as a
"skilled" worker, get a net wage of £3 per week for the time of his ex-
pedition to the sheep stations to shear, and having found that a rate
of 24s. per 100 sheep would give this net result, the Court fixed 24s.
per 100 as the minimum rate.^ In finding the net returns of the whole
expedition allowances had to be made for days of traveling and wait-
ing, expenses en route, cost of mess and combs and cutters.*' This
system of finding the net result of the expedition, and what would
be a fair return for the expedition, was also adopted in the case of
persons employed by fruit-growers on the River Murray.' Some-
times the Court protects pieceworkers in making their bargain by
1 Ship's Stewards, 4 Com. Arb. 61, 73 (1910) ; Ship's Officers, 4 Com. Arb.
8g, loi (1910).
^Seamen, 5 Com. Arb. 147, 160 (1911).
^Tramways, 6 Com. Arb. 130, 144 (1912).
*S Com. Arb. 48 (1911).
^Ibid. 73, 79.
oibid. 74, 76. '^Fruit-growers, 6 Com. Arb. 61, 68 (1912).
A NEW PROVINCE FOR LAW AND ORDER 677
prescribing that their remuneration shall not fall below, in result, a
certain time-work minimum.^
The system of arbitration adopted by the act is based on union-
ism. Indeed, without unions it is hard to conceive how arbitration
could be worked. It is true that there are methods provided by which
the Court can intervene for the preservation of industrial peace even
when its powers are not invoked by any union ; but no party can
file a plaint for the settlement of a dispute except an "organization";
that is to say, a union of employers or of employees registered under
the act.^ One of the "chief objects" of the act, as stated in Sec-
tion 2, is "to facilitate and encourage the organization of representa-
tive bodies of employers and of employees and the submission of
industrial disputes to the Court by organizations"; and it follows
that the Court will not assist an employer in devices to stamp out
unionism.* It is, of course, better for an employer that he should
not be worried by complaints of individual employees and that any
complaints should be presented collectively by some responsible
union. He has then the advantage of being able to deal with his
employees on a consistent scheme, equitable all round the service, and
his time is not taken up by petty complaints or individual fads. A
demand made on him comes from a responsible executive, with the
consent, direct or indirect, of the organized body of members of the
union. Moreover, from the point of view of the employees, it is
better that an individual employee should not, by complaining, incur
the risk of becoming a marked man or of being removed, and the
individual employee is generally powerless. From the point of view
of the Court and of the public, it is fair to state that in nearly every
case — I can only remember one case to the contrary — the influence
of union leaders has always been in the direction of peace. It
would not be so, probably, if there were no means of obtaining an
improvement of conditions except by strike, actual or threatened,
but in Australia the leaders can hold out to the members of the union
a prospect of relief, without strike, from the Court or from some
wages board.* It is significant that in the one exceptional case re-
ferred to, the leaders of the union have been converted so that they
are now strong advocates of arbitration.
^Ibid. 7S. 3 Ti-amways, 6 Com. Arb. 130, 143 (1Q12).
^Section 19. ^Marine Engineers, 6 Com. Arb. 95, 100 (1912).
678 TRADE UNIONISM AND LABOR PROBLEMS
But then comes the difficult question of "preference to unionists."
Preference to unionists is the Australian analogue of the "preferential
union shop" made familiar in some of the garment industries of the
United States. The act gives the Court power to direct that as
between members of organizations (unions) of employees and other
persons desiring employment at the same time preference shall be
given to such members, other things being equal.^ But it is only
a power, not a duty, to order such preference, and the Court is very
loath to exercise the power. " The absolute power of choice [between
applicants for employment] is one of the recommendations of the
minimum-wage system from the employer's point of view — he can
select the best men available when he has to pay a certain rate."^
For this reason preference was refused in the case of shearers etc.;^
in the case of seamen;* in the case of builders' laborers.' Yet the
Court recognizes the difficulty of the position. As was said in the
builders' laborers case :
The truth is, preference is sought for unionists in order to pre-
vent preference of nonunionists or antiunionists — to prevent the
gradual bleeding of unionism by the feeding of nonunionism. It is
a weapon of defense. For instance, some employers here hired men
through the Independent Workers' Federation — a body supported
chiefly by employers' money, and devised to frustrate the ordi-
nary unions; and those who applied for work at the office of this
body would not be introduced to the employer unless they ceased to
be members of the ordinary unions and became members of this
body. What is to be done to protect men in the exercise of their
right as free men to combine for their mutual benefit, seeing that the
employing class has the tremendous power of giving or withholding
work? The only remedy that the act provides is an order for pref-
erence ; and it is doubtful whether such an order is appropriate or
effective. It is, indeed, very trying for men who pay full dues to a
legitimate union to work side by side with men who do not—
with men who look to their own interests only, seeking to curry
favor with the employers, getting the benefit of any general rise in
wages or betterment of conditions which is secured without their aid
and in the teeth of their opposition, men who are preferred (other
thmgs bemg equal) for vacancies and promotion. Every fair man
1 Section 40.
^Engine Drivers, J Com. Arb. 9, 25 (1911) ; 7 Com. Arb. 132, 147 (1913) :
Tramways, 6 Com. Arb. 35, 47 (1912). '*/ ^ v in
^S Com. Arb. 48, 99 (1911).
*S Com. Arb. 147, 170 (1911). b^ Com. Arb. 210, 233 (1913).
A NEW PROVINCE FOR LAW AND ORDER 679
I'ecognizes the difficulty of the position — every man who is not too
much of a partisan to look sometimes at the other side of the hedge.
In another case recently before me a nonunionist told me that he
acted solely on the basis of his personal interest, without any regard
for the interests of his fellow workers. He looked for favors to him-
self because he kept away from those who combined for the common
good of the whole body. It is not out of consideration for such men
that I refuse preference ; it is rather out of consideration for such
employers as honestly take the best man available, unionist or not.
I do not want them to be harassed with the doubt, when, select-
ing men for a post, whether they can prove their appointee to be
better than all the unionist applicants. I refuse preference also out
of consideration for many who have not joined any union simply
because they have not felt the need. In the case of country building
work, for instance, it is common for men on farms etc., when farm
work is not pressing, to take a job as builders' laborer. Why should
the employer be compelled to bring union laborers from the city?
After all, the direct way for unionists to counteract unfair preference
of nonunionists is 'for the unionists to excel— to give to the employer
the best service. It is nearly always found that employers prefer a
first-class man who is unionist to a second-class man who is
nonunionist.^
The only case in which the Court has ordered preference is the
case of a tramway company which deliberately discriminated against
unionists and refused to undertake not to discriminate in future.^ It
is to be observed that the Court is not given power by the adt to
order that the employer shall not discriminate against unionists in
giving or withholding employment.
The imposition of a minimum wage, a wage below which an em-
ployer must not go in employing a worker of a given character,
implies, of course, an admission of the truth of the doctrine of modern
economists, of all schools I think, that freedom of contract is a mis-
nomer as applied to the contract between an employer and an ordi-
nary individual employee. The strategic position of the employer in a
contest as to wages is much stronger than that of the individual em-
ployee. "The power of the employer to withhold bread is a much
more effective weapon than the power of the employee to refuse to
labor." ^ Low wages are bad in the worker's eyes, but unemployment,
17 Com. Arb. 210, 233-234 (1913).
^Tramways, 6 Com. Arb. 130, 162 (1912).
^Engine Drivers, s Com. Arb. 9, 27 (1911).
68o TRADE UNIONISM AND LABOR PROBLEMS
with starvation in the background, is worse. The position was put
luminously once, as well as with unconscious humor, by an em-
ployer on whom a plaint was served for settlement of a dispute by the
Court. In place of filing an answer he wrote a letter to the registrar,
denying that he was a party to any dispute. "I have never," said he,
"quarreled or disputed with a laborer of any kind. ... 7/ we cannot
agree, well, we will part ; that ends the whole. . . . Love is the power
which will end all struggles, not legislation." Other respondents pin
their faith not to "love" but to the sterner "law of supply and de-
mand." They treat this law as being, in the matter of wages, more
inexorable and inevitable than even the law of gravitation, as not
being subject, as laws of nature are, to counteraction, to control, to
direction. "One may dam up a river, or even change its course;
but one cannot [it is said] raise wages above the level of its unregu-
lated price, above the level of a sum which a man will accept rather
than be starved."^ If the Court did nothing el6e than drag such
theories into the light of day and into free discussion, it would be
doing good service to the community. But it is coming to be recog-
nized that what the Court does in fixing a minimum wage is by no
means novel in principle. There are many acts of many legislatures
which prescribe minimum conditions on other subjects. For example,
mining acts often prescribe minimum conditions as to ventilation,
timbering, safety appliances, machinery, sanitation. These matters
are not left to individual bargaining.
There are no definite figures with regard to the cost to the parties
of arbitration proceedings, but the cost is very slight. There are
seldom any costs incurred in employing lawyers, for, under Section 2 7
of the act, lawyers cannot be employed except with the consent of
both parties, and the employees generally refuse their consent. The
secretary of the organization generally puts its case, and the em-
ployers or some permanent officer generally puts the employers' case.
The principal expense of an arbitration is that of bringing wit-
nesses. If prohibition proceedings are taken in the High Court to
prevent the enforcement of an award on the ground that the Court
of Conciliation has exceeded its jurisdiction (of which I shall say
^Engine Drivers, S Com. Arb. 27, 28 (1911) ; Ship's Officers, 6 Com. Arb. 6,
18 (1912) ; Marine Engineers, 6 Com. Arb. 95, loi (1912).
A NEW PROVINCE FOR LAW AND ORDER 681
more presently), no doubt heavy, very heavy, expenses are incurred,
but these are not expenses of the arbitration.
But it has to be admitted that proceedings in the Court of Con-
ciliation often take a very long time, sometimes weeks, in a few cases
months. The proceedings cannot be otherwise than lengthy, as the
disputes of which the Court can take cognizance are so widespread —
must extend from one state into one or more other states. Moreover,
the habit is to bring before the employers, and afterwards before the
Court, a very long list of conditions in dispute, and the case of each
employer has to be fairly considered by the Court in connection with
each grievance. The number of employers respondent to a plaint is
generally great. There were 311 employers in the Engine Drivers'
case,^ 570 in the case of the Builders' Laborers,^ 650 in that of the
Fruit-growers,^ and 2549 at least in that of the Shearers.* The
Court has no power to make an award a common rule of the industry ;
it cannot investigate and settle the proper conditions to be applied
in one typical undertaking and then extend the same conditions to
other undertakings of the same character. The act purported to give
this power to the Court, but it was held by the High Court, on a case
stated, that the act was in this respect unconstitutional and invalid.^
This want of power to make a common rule for the industry not only
lengthens the proceedings but it also may operate to the prejudice of
the employers who are bound by the award. For the Court can deal
only with employers who employ members of the union. Some rival
employers may have no members of the union in their employment
and therefore have to be excluded from the award. Their hands are
free as to wages, while the hands of the others are fettered, and this
is, of course, unfair as between competitors in the trade. In one case,
that of the Boot Factories,* the difficulty was met by the employers
and employees concurring in an application before the wages boards
of each of the states concerned to have the terms of the award made a
common rule for the state. But this remedy is not always available.
^7 Com. Arb. 132 (1913).
2 7 Com. Arb. 210 {1913).
^6 Com. Arb. 61, 65 (1912).
*S Com. Arb. 48, 65 (1911).
^Boot Factories, 11 Com. Law Rep. 311 (1910).
°4 Com. Arb. 1 (1910) ; Builders' Laborers, 7 Com. Arb. 210, 235 (1913).
682 TRADE UNIONISM AND LABOR PROBLEMS
There is a provision in the act^ enabhng the Court to appoint
a Board of Reference, assigning to it the function of determining
specified matters which under the award may require to be deter-
mined. Such a provision, if properly drafted and valid, would be
of eminent service to psace. Difficulties often arise under an award,
owing to the vast variety of methods in the different undertakings,
as to the application of the words of the award to some particular
case. These and other difficulties ought to be. met by collective ad-
justment between representatives of the employers on the one side
and the representatives of the union on the other, with a neutral
chairman ; but from the nature of the case there would have to be
a separate board in each of the centers of the industry. Nothing
would tend more to prevent serious friction and to promote mutual
understanding of employers and employees. "A suitable Board of
Reference, under the aegis of a strong union, is a safety valve for any
industry."^ But, unfortunately, as the section stands, with the in-
terpretation put upon it by the High Court, it is practically use-
less. The parties on both sides of a dispute often seek a board,
or rather boards, of reference,^ but the Court cannot generally
help them. Sometimes, however, the parties to the dispute make
and file agreements between the union and the several employers
for a board and leave the Court to award on the other subjects in
dispute; and the agreements are certified by the Court, and on
being filed under Section 24 have the same binding effect as an
award.*
There are two important powers of which the Court has frequently
availed itself, or threatened to avail itself, with very excellent effect.'^
These are (i) the power to withhold an award if it appear "that
further proceedings by the Court are not desirable in the public
interest,"" and (2) the power to vary an award.'^ Sometimes the
employees, though seeking an award, have taken up an obstinate
attitude, intimating in effect that if the award does not meet their
wishes they will not abide by it ; and the Court has plainly intimated
^ Section 40 a.
2 Engine Drivers, 7 Com. Arb. 132, 144 (1913).
s Seamen, 6 Com. Arb. 59 (1912).
* Engine Drivers, 7 Com. Arb. 132, 135 (1913).
E Fruit-growers, 6 Com. Arb. 61, 78 (1912).
8 Section 38 h. 1 Section 38 o.
A NEW PROVINCE FOR LAW AND ORDER 683
that it will not proceed with the arbitration on such terms.^ It
cannot be for the public interest to proceed with the arbitration
under such a constraint. Arbitration by the Court is meant to be
a substitute for the method of strike, and "you cannot have award
and strike too."^ In one case, while the Court was preparing an
award for seamen and firemen information came that the firemen of
the S. S. Koombana refused to work on the ship unless a certain chief
steward were removed. The position was serious ; the ship carried
the mails, as well as passengers and cargo, for ports on the West
Australian coast. There was an agreement in existence under which
it was a breach of agreement on the part of the union jf by reason
of any dispute a vessel were detained twenty-four hours. The Court
intimated that it would not make its award so long as the agreement
was not observed. As a result officials of the union conducted suit-
able firemen to the port where the vessel lay, put them on board, and
the Koombana went on its way ; then, and not till then, the Court
gave its award.^
The power to vary an award has also been held over the head of
a recalcitrant union. It is not fair to keep the employers bound
by the award if the union takes the benefit of the award and rejects
the burden. The Court has power to lower or annul the minimum
wage in such a case if necessary.* Fortunately, it never has been
necessary. I may give one case in point. The wharf laborers were
on strike in Brisbane ; seamen who were enjoying the benefit of an
award were ordered to unload their vessel. They were naturally
indisposed to comply, but before refusing they telegraphed to the
executive of their union for directions. They were told by the
executive to unload or they would lose the award. They unloaded.
Another very valuable power is that conferred by Parliament in
19 10, under which the president may, when a dispute exists or is
threatened, summon any person to attend a conference in his pres-
ence. The attendance is compulsory, enforceable by penalty.^ Fre-
quently a quiet talk. at such a conference has prevented a strike
^Gas Employees, 7 Com. Arb. 58, 62 (1913); Broken Hill Mine, 3 Com.
Arb. I, 20 (1909).
2 Liquor Trade, 7 Com. Arb. 255 (1913).
'Seamen, s Com. Arb. 147, 173-174 (1911).
* Fruit-growers, 6 Com. Arb. 61, 78 (1912).
'Section 160.
684 TRADE UNIONISM AND LABOR PROBLEMS
which was imminent/ Frequently the parties arrange to proceed for
arbitration and make temporary arrangements for carrying on work
until the award.^ Sometimes an actual strike, confined to one state
though the dispute extended to two states, has been stopped, the
men going back to work at the old rates until the award.^ A further
amendment was made in the act in 191 1, under which, if no agree-
ment has been reached at the conference, the president can refer
the dispute to the Court for arbitration.* The fact that this whip
is in the hands of the president, to be used in the last resort, and
that the party with the stronger position for the time being will have
to submit to an award if he takes up an obstinate attitude against all
agreement, is found to operate as a strong inducement to compromise
and to reasonable arrangements by consent. Agreements in lieu of
award have often been fixed up in a conference or as the result of
a conference.^ The agreements are generally produced in court when
the case is called on, and the president certifies to them and has them
filed, and they operate — are enforceable — as an award.^ In one long
case, where the Court was faced with a dispute in ten tramway under-
takings, no less than eight of the undertakings arranged agreements
during the course of the long hearing, with the assistance of the
president given in frequent interviews with the parties in chambers.'^
It must not be supposed that the desire for the assistance of the
president or of the Court is confined to employees. At first there
was a tendency on the part of employers, individually and in asso-
ciation, to resent interference, as preventing the employers from
carrying on, as they said, their own business in their own way. But
^ Seamen, 4 Com. Arb. 108 (1910) ; s Com. Arb. 147, 134 (1911) ; Fruit-
growers, S Com. Arb. 37, 183 (1911) ; 6 Com. Arb. 61, 62 (1912) ; Steamboat
Enginemen, 6 Com. Arb. 60 (1912); Bakers, 7 Com. Arb. 257-258 (1913).
2 Export Butchers, 4 Com. Arb. 82, 87 (1910) ; Glass Bottle Makers, 6 Com.
Arb. 176 (1912) ; Steamboat Enginemen, 7 Com. Arb. 37 (1913) ; Bakers, 7
Com. Arb. 257-258 (1913).
^Export Butchers, 7 Com. Arb. 52-54 (1913).
* Section 19 d.
6 Engine Drivers, 6 Com. Arb. 126 (1912) ; Glass Bottle Makers, 6 Com. Arb.
176 (1912); 7 Com. Arb. 43 (1913) ; Seamen (as to manning), 7 Com. Arb.
2 (1913); Journalists, 7 Com. Arb. 112, 113 (1913); Liquor Trade, 6 Com.
Arb. 129 (1912) ; 7 Com. Arb. 254 (1913).
8 Section 24.
^Tramways, 6 Com. Arb. 130, 140 (1912) ; and see Journalists, 7 Com. Arb.
112, 113 (1913).
A NEW PROVINCE FOR LAW AND ORDER 685
facts have been too strong for them. Employers now frequently
request the president to intervene and to summon a conference in
order to prevent a stoppage of work.^ They seek regulation, by
agreement or award, in order that they may not find their plant
lying idle and their business at a standstill, and, in some cases, a
season lost.
Perhaps it will be well to give a concrete case. There is in Vic-
toria a great butchering trade in lambs for export, involving, I be-
lieve, more than a million pounds per annum. The lambs are sent
down to Melbourne in the spring, — September or October, — and
unless they are butchered at once they deteriorate in condition and
the season is lost. The men suddenly refused to go to work at the
old rates ; telegrams flew up to the country settlements to stop truck-
ing any more lambs ; the settlers were faced with the prospect of
losing their market, and the storekeeping and incidental industries
with the prospect of grievous loss. It so happened that the same
demand was made on employers in New South Wales, so that there
seemed to be a two-state dispute, which gave jurisdiction to the
president. A conference was summoned at the request of the em-
ployers, the men induced to go to work under the conditions already
in operation on a promise that the Court would arbitrate and make
the award retrospective to the resumption of work, and the season
was saved. ^ The parties prepared themselves peacefully to discuss
their differences before the Court, but — this is the point — the work
went on.
Another concrete case, showing the desire of both sides for definite
regulation of conditions by the Court, is that of the Ship's Officers.
The men in their demands had been too specific ; the High Court had
decided that the dispute must be treated as confined to the specific
demands made and that the Court of Conciliation could not prescribe
a remedy for any grievance different from that remedy demanded.
The Court of Conciliation found that the granting of the demands as
asked would tend to promote strife rather than peace in the industry
^Seamen, 4 Com. Arb. 108 (1910) ; s Com. Arb. 147, 154 (1911); Fruit-
growers, S Com, Arb. 37 (1911); Waterside Workers, 6 Com. Arb. 3 (1912) ;
Glass Bottle Makers, 6 Com. Arb. 176 (1912) ; Liquor Trade, 7 Com. Arb. 254
(1913) ; Export Butchers, 7 Com. Arb. 52 (1913) ; Victorian Stevedoring Co.,
5 Com. Arb. i (1911).
^Export Butchers, 7 Com. Arb. 52, 54 (1913).
686 TRADE UNIONISM AND LABOR PROBLEMS
and stated its difficulties to the parties. Both parties were so anxious
for a definite arrangement of conditions that they consented to em-
body in an agreement any terms whatever that the president thought
proper, whatever the ambit of the dispute, whatever the jurisdiction of
the Court. The president accordingly continued the hearing of the
case and drew up an agreement which both parties signed and which
they have both loyally observed.^
There is such a strong desire for the assistance of the machinery
of the act that on several occasions an attempt has been made by
employers, with or without the concurrence of employees, to induce
the president to intervene in cases in which he has had to refuse his
assistance on the ground that the dispute does not extend beyond
one state and must be dealt with, if at all, by state authorities.^ Quite
recently the president has had, however, to make an exception to his
rule not to meddle, even by consent, with matters outside his juris-
diction. There was a dispute between laborers and artisans on the
one side and the commonwealth government on the other as to con-
ditions of labor in the construction of a naval base in Western Port,
Victoria ; all parties signed a submission to arbitration, leaving every-
thing to the determination of the president as in a voluntary arbitra-
tion. In view of the serious effects of a stoppage of the works in
time of war, the president consented to act, heard the parties, and
gave an award, and the parties are peacefully acting in accordance
with it.'
But the course of the Court, like the course of true love, does not
always run smooth. It has to meet some bitter opposition. Some-
times the opposition comes from a union of employees — generally
a union which avowedly accepts the doctrine of the "class war" and
aims at "the emancipation of labor by the abolition of the wage
system."* I have even seen a cartoon in a labor newspaper showing
a laborer walking towards a gate marked "Freedom," and a bulldog
with a collar marked "Arbitration" bars his path. It is but fair to
say that this cartoon appeared in a state which has a local arbitration
court. But the attacks on the Court and its awards are, of course,
1 Ship's Officers, 4 Com. Arb. 89, 91 (1910) ; Hairdressers, 6 Com. Arb. 1
(1912).
2 Victorian Stevedoring Co., s Com. Arb. i (1911).
'Naval base — not reported.
* Fruit-growers, 6 Com. Arb. 61, 65, 78 (1912).
A NEW PROVINCE FOR LAW AND ORDER 687
generally made from the side of employers, many of whom naturally
resent any curtailment of their powers. The applications for prohibi-
tion against the president have been sometimes in part or temporarily
successful. Prohibition is applied for because of some alleged excess
of the Court's jurisdiction, and the argument generally turns on the
questions. Was there a dispute ? and, if there was. Did it extend be-
yond one state? Sometimes the argument turns on the validity of
some section of the act. The proceedings are very long and very
costly, and it is astonishing what a wealth of learning is involved in
the meaning of the word "dispute" and the words "extending beyond
the limit of any one state." The discussions occupy a very consider-
able proportion of the Commonwealth Law Reports, but they would
not interest those for whose information I write this article. The
legal discussions do not affect the principles or methods of action of
the Court of Conciliation in cases where there is jurisdiction.
It has to be admitted that the awards, in nearly all cases, have
been made in a period when the cost of living is rising and that
therefore they have generally increased the existing minimum Tate.
The Court found, about 191 1, that the cost of living was substantially
increasing, but it refused to raise the basic wage until the increase
could be quantitatively stated.^ It suggested the expediency of official
statistics on the subject, and the Commonwealth Statistician now
furnishes periodically statistics which have materially assisted the
Court. According to the Commonwealth Statistician, the cost of
living, taking Australia as a whole, has increased by 25 per cent from
1901 to 1913. For such necessaries as could be bought in 1901 for £1
one must now pay 2 5 s.^ What will happen if the cost of living should
decrease — if the minimum for the basic or living wage shall have
to be lowered ? It is a fair question, but it is for the future to give
the answer. I wish to confine my words to my personal experience.
Yet there have been cases in which the Court has refused increases
or has actually decreased the minimum rates, and the employees have
listened to the reasons and loyally submitted. In the case of the
Shearers^ the rates for shearing, 24 s. per 100, as fixed by my
predecessor, were not increased ; and the strongest union in Australia,
^Engine Drivers, S Com. Arb. 9, 14, 16 (1911).
^Postal Electridans, 7 Com. Arb. S, 12 (1913).
^Shearers, 5 Com. Arb. 48 (1911).
688 TRADE UNIONISM AND LABOR PROBLEMS
the Australian Workers' Union, acquiesced. In the same case the
Court found that too high minimum rates had previously been fixed
for wool pressers and lowered them, stating its reasons. There was
no strike, no refusal to Work, no expression, that I know, of discon-
tent. In the case of the Builders' Laborers^ the Court fixed lower
rates for Ballarat and Bendigo than for Melbourne, and lower rates
for Melbourne than for Sydney, all because of differences in the cost
of living. The Union leaders were troubled because these cities had
always maintained the same "union rate," but they told the mem-
bers of the Union the Court's reasons, and there was peace. Again,
in the same case the Court fixed for Melbourne a lower minimum rate
for scaffolders and demolishers than had been previously fixed by
the wages board, — 1 5. 3 J^ rf. per hour instead of i s. 4j4 d. per hour, —
and the men submitted. The truth is, I think, that if the men secure
the essentials of food, shelter, clothing, etc., they are not so un-
reasonable as is sometimes supposed. They do not love strikes
for the sake of strikes, and the great majority are generally quite
willing to submit to reason if they feel that they are reasonably
treated.
This article is confined, as I stated at the beginning, to the Fed-
eral Court of Conciliation and to my own actual experience in con-
nection therewith. But American readers should know that in each
of the six Australian states there is some wages-board system xmder
the state law or some industrial or arbitration court. Victoria was
the first state to adopt a system of wages boards, about 1896, and
her example has been more or less followed in Queensland, South
Australia, and Tasmania. Western Australia has an arbitration
court, and New South Wales has a combination of the two systems —
wages boards and an industrial court. There is no organic con-
nection between the state systems and the federal system. The
object of the wages boards is primarily to prevent sweating or under-
payment ; the object of the Federal Court is to preserve or restore
industrial peace. The Federal Court deals with disputes, as such,
and prescribes wages etc. merely as incidental to the prevention or
settlement of disputes ; the wages board prescribes minimum wages
and has no direct relation to disputes. But, as is obvious from the
nature of the case, the systems often overlap. A wages board consists,
1 Builders' Laborers, 7 Com. Arb. 210 (1913).
A NEW PROVINCE FOR LAW AND ORDER 689
generally, of representatives selected by employers and of repre-
sentatives selected by employees in equal numbers, with a neutral
chairman. There is not, I think, any fixed principle stated by the
legislatures for the guidance of the boards in prescribing the mini-
mum wage. At one time the Victorian legislature enacted that the
minimum wage should not exceed the wage paid by "reputable em-
ployers," but this negative provision has been found unsuitable and
repealed. The wages boards cannot deal with all industrial condi-
tions ; the Federal Court can deal with any industrial condition that
comes into dispute. The wages boards do not publish the reasons for
their determinations ; the Federal Court does. As a result I find that
the wages boards frequently look for guidance in their action to the
reasoning of the Federal Court. The wages boards, within the limits
of area assigned to them, bind all employers by their determinations ;
the Federal Court can only bind those who are concerned in the dis-
pute. The wages boards, being state creations, are very much af-
fected by the consideration of interstate competition.^ In dealing
with boot factories the New South Wales tribunal would have fixed
the minimum for journeymen at gs. per day but for the fact that
the rival factories of Victoria had a minimum of 8 s. per day. The
Federal Court, when asked to intervene, was able, as an Australian
tribunal, to bind the employers of -both states to pay the 9^. per day.^
Another weakness in the wages-board system is that employees in the
presence of an employer or a possible employer have not the inde-
pendent position which would enable them to act fearlessly. This is
especially true where, as in the case of city tramways, there is only
one undertaking where a tramway man can get employment. In the
case of the Brisbane tramways it appeared that it was the manager
who, as a member of the wages board, made all the proposals, and
that every one of his proposals was carried unanimously.^ Again,
the decision of the wages board of one state is frequently inconsistent
with the decision of the wages board of an adjoining state. There is
no one final coordinating authority, as in the case of the Federal
Court, and the result is often that contrasts appear and dissatis-
faction arises and industrial trouble. For instance, a large mining
^Engine Drivers, s Com. Arb. 9, 17 (1911).
2Boot Factories, 4 Com. Arb. i, 8 (1910).
^Tramways, 6 Com. Arb. 130, 149 (1912).
690 TRADE UNIONISM AND LABOR PROBLEMS
district, of essentially the same physical and industrial character,
with the same cost of -living, is divided by the artificial boundary lin£
between two states. The wages board of one state prescribed one set
of wages and conditions ; the wages board of the other state pre-
scribed a lower set. The consequences were disastrous.^ A New
South Wales wages board gave, in the case of builders' laborers,^
the lowest rate to scaffolders and the highest to hodmen. The Vic-
torian wages board gave the highest rate to scaffolders. The New
South Wales board gave a low rate to demolishers; the Victorian
board gave the highest rate. The Federal Court, when it came to
act, prescribed a flat minimum rate for all the laborers, and the em-
ployees were satisfied. They knew that a man of exceptional value
as a scaffolder or in any other capacity would still be able to demand
and obtain a rate higher than the minimum. It is often said that
the minimum rate tends to become the maximum, but there has been
no proof of such tendency as yet. Moreover, the wages boards are
often not suitably grouped, and there is a tendency to ignore the
interests of unrepresented minorities, of employers as well as of
employees. For example, there was in Victoria a " Hay, chaff, wood,
and coal board," composed, as to employers, of ordinary wood, coal,
and produce retailers. They managed to get a determination which
kept their own yardmen at low wages but fixed a disproportionately
large minimum for yardmen who handled coke, because the gas com-
pany of the city was practically the only vendor of coke and it was
not represented on the board.^ But most of these defects, and other
defects which I could point out, are not of the essence of the system
and will probably be removed or obviated in the light of experience.
Employers have assured me that they welcome the fixing of minimum
rates by the boards or by the Court. They know now definitely what
they must pay, and so long as they pay it they feel no more the
incessant nagging of unions or employees as to wages. Nor can any
impartial person deny the immense relief which the system of wages
boards has afforded to thousands of the most helpless families
throughout Australia. Wages boards constitute one of the most useful
factors of those which tend, in the words of James Russell Lowell, to
1 Engine Drivers, 7 Com. Arb. 132, 145 (1913).
^Builders' Laborers, 7 Com. Arb. 210 (1913).
^Gas Employees, 7 Com. Arb. 58, 65 (1913).
A NEW PROVINCE FOR LAW AND ORDER 691
"lift up the manhood of the poor" and to provide proper sustenance
and upbringing for the children of the nation.
Perhaps I should add here that up to the present I have not been
able to trace any increase of price of commodities to the fixing of
minimum wages. It is not the function of the Court to ascertain the
truth as to the causes of increased prices, but the Court watches
for any side lights on this important subject. In one case, I believe,
a wages board raised the wages of milk carters by is. per day, and
the milk vendors at once raised the price of milk by id. per quart.
For 100 quarts per day this would mean an increase of receipts to
the amount of Ss. 4d. per day, so that' the milk vendors had raised
the price of milk far beyond the amount necessary to recoup them
for the additional wages.
It will be asked, however. What is the net result of the Court of
Conciliation? Have strikes ceased in Australia? The answer must
be that they have not. There have been numerous strikes in Aus-
tralia, as elsewhere. But since the act came into operation there has
been no strike extending " beyond the limits of any one state." Those
who are old enough to recall the terrible shearers' strike and seamen's
strike of the nineties, with their attendant losses and privations, tur-
bulence and violence, will realize how much ground has been gained.
The strikes which still occur are strikes within a single state, and
disputes within a single state are outside the jurisdiction of the Court.
It can be safely said that since the act every dispute "extending
beyond the limits of any one state" comes before the Court or the
president, either on the application of parties to the dispute or on the
initiative of the officers of the Court.^ Moreover, with the exception
of one doubtful case, in which I was not personally concerned and
do not know the full particulars, there has been no instance of an
award's being flouted by the employees, no instance of the em-
ployees' refusing to work under an award. There have been cases in
which parties have differed in the interpretation of an award in its
application to exceptional circumstances; there have been instances
of inadvertent disobedience ; and these cases have sometimes come to
the courts in the form of an action for a penalty. But these were
cases in which the award was treated as regulating the rights of the
parties, not treated as a thing to be rejected.
1 Section 19.
692 TRADE UNIONISM AND LABOR PROBLEMS
In 191 1 Parliament intrusted to the Court another formidable
function — the settling of wages, hours, and conditions of labor for
federal public servants. This function does not rest on the constitu-
tional power to make laws for conciliation and arbitration in indus-
trial disputes;^ it rests on the absolute power of the commonwealth
in relation to its own servants. The public servants are allowed to
group themselves in unions, "organizations," as they think fit and to
approach the Court with a plaint. It seems at first sight curious that
Parliament should intrust any tribunal with a power of adjudicating
on such subjects, but Parliament has been careful to retain the final
control of the commonwealth finances. For the award does not come
into operation till the expiration of thirty days after it has been laid
before both Houses, and Parliament can, if it sees fit, pass a reso-
lution disapproving of the award. This remarkable jurisdiction over
public servants deserves a study all to itself, and I can only say,
though there have been several important awards under it, no award
has yet met with the disapprobation of Parliament, and no resolution
of disapproval has even been tabled.
In conclusion I may state that I am not unaware of the far-reaching
schemes, much discussed everywhere, which contemplate conditions
of society in which the adjustment of labor conditions between profit-
makers and wage-earners may become unnecessary. Our AustraUan
Court has nothing to do with these schemes. It has to shape its con-
clusions on the solid anvil of existing industrial facts, in the fulfill-
ment of definite official responsibilities. It has the advantage, as well
as the disadvantage, of being limited in its powers and its objects. Its
objective is industrial peace, as between those who do the work and
those who direct it. It has no duty, it has no right, to favor or to
condemn any theories of social reconstruction. It neither hinders nor
helps them. But it is obvious that even if all industries were to be
carried on under state direction, industrial peace would be as vitally
important as it is now, and that it could not be secured without
recognition of the principle which the Court has adopted, that each
worker must have, at the least, his essential human needs satisfied
and that among the human needs there must be included the needs
of the family. Sobriety, health, efficiency, the proper rearing of the
young, morality, humanity, all depend greatly on family life, and
1 Article XXXV, Section 51.
PROVINCE FOR LAW AND ORDER 693
family life cannot be maintained without suitable economic condi-
tions. The reasoning which has lately committed to the Court the
function of settling conditions of labor for public servants would not
be less, would be even more applicable, if the state had more servants
than it has.
Yet, though the functions of the Court are definite and limited,
there is opened up for idealists a very wide horizon, with, perhaps,
something of the glow of a sunrise. Men accept the doom, the
blessing, of work ; they do not dispute the necessity of the struggle
with nature for existence. They are willing enough to work, but
even good work does not necessarily insure a proper human sub-
sistence, and when they protest against this condition of things they
are told that their aims are too "materialistic." Give them relief
from their materialistic anxiety, give them reasonable certainty that
their essential material needs will be met by honest work, and you
release infinite stores of human energy for higher efforts, for nobler
ideals, when
" Body gets its sop, and holds its noise, and leaves soul free a little."
Henry Bournes Higgins
High Court op Australia, Melbourne
XLI
WAGE THEORIES IN INDUSTRIAL ARBITRATION^
LABOR disputes in modern industry may be divided generally
into thosp which involve wages and those which involve a prin-
ciple. A principle cannot be arbitrated. If it is arbitrated it ceases
to be a principle. To submit it is to surrender it. There is therefore
a distinct category of industrial disturbances that are not susceptible
of adjustment by any method which denies to the disputants the
direct participation in the settlement. But the great group of labor
differences, in which principle is not involved, may be adjusted,
when other peaceful means fail, through intervention of a third party.
The principle of industrial arbitration is an assumption that all dis-
putes involving wages are capable of adjustment if undertaken in
proper time. The meager experience of the United States and the
broader experience of other countries have promised to find in the
intervention of an arbitrator clothed with definite powers of adjudica-
tion a vigorous aid to the maintenance of industrial peace. The
distinctive principle of arbitration, which in the practice of a quarter
of a century ago was an experimental social novelty, has received, in
some form, almost world-wide acceptance. And the day is far from
prospering the culture of the methods of peace.
A judgment of the validity of the wage theories underlying the
methods of industrial arbitration must reflect one's conception of
the place of the individual man in the scheme of economics. Is the
man himself the end of economic activity or a means to the end, a
factor of production? The first concept incorporates the idea of
social welfare; the second involves a doctrine of individual self-
interest : let survive him who can. The theoretical defenses of in-
dustrial arbitration, as I propose to review them, have been usually
in terms of social welfare or of public policy. In the scientific criti-
cisms there has been evident, on the other hand, an essentially
^From American Economic Review, Vol. VII (1916), pp. 324-342.
694
WAGE THEORIES IN ARBITRATION 695
individualistic, competitive conception — one which speaks not the
language of general immediate social interest but rather that of the
competing entrepreneur to whom wages are only an item of cost, to
whom labor appears more or less impersonal. Of this general dis-
tinction, which is by no means without exception, there is ample evi-
dence in arbitration precedents.
The two ideals of distributive justice, one social, the other indi-
vidual, have not always — or even, perhaps, usually — coincided.
The aim of this paper is to suggest a judgment of the validity of
wage theories in arbitration as a part of a unified theory of distribu-
tion. To this end it is well to examine the actual precedents as they
are to be found in the different industrial communities. It is neces-
sary, therefore, for science, to consider wages as the individual enter-
priser in the business world views them. But whether or not a
strictly economic justification for wage arbitration can be found is
not finally indicative of its proper place in the scheme of modern
social legislation. Ulterior social considerations may and often do,
in a dynamic economy, far outweigh those that are purely economic.
When the fundamental conditions of economic life are in rapid and
continuous flux, ideal schemes must sometimes be held in abey-
ance in favor of immediate remedial expedients.
To the term "industrial arbitration," unfortunately, no uniform
meaning is attached. Generically it denotes the intervention of a
third party to aid in the settlement of disputes between employers
and employees. In this sense it includes mediation of whatever kind,
conciliation, and arbitration in the narrower and now the most gen-
erally accepted sense, in which it is used in this paper — namely, the
determination of an industrial dispute by a third party independent
of direct participation by the immediate disputants. Mediation and
concihation are merely refined methods of collective bargaining.
Moreover, arbitration may be voluntary or compulsory. Both the
reference of the dispute to an arbitrator and the acquiescence in the
terms of his award may be voluntary ; or the reference may be volun-
tary and the award compulsory ; or both the reference and the award
may be compulsory. It is only arbitration providing for a decree
binding upon the disputants with which we are concerned. Arbi-
tration with voluntary award is a whim. An award unsatisfactory to
either party becomes binding upon neither.
696 TRADE UNIONISM AND LABOR PROBLEMS
Sidney and Beatrice Webb say: "The essential feature of arbi-
tration as a means of determining the conditions of employment is
that the decision is not the will of either party, nor the outcome of
negotiations between them^ but the fiat of an umpire or arbitrator."^
To some the statement will not be acceptable that conciliation is
simply the collective bargain in a more polite and usually a more
effective form. Many competent critics, moreover, see in the proc-
esses of intermediation the promise of the ultimate future mainte-
nance of industrial peace. To some, indeed, the implication that
agreement between the owner of the instruments of production and
the organized group of laborers seeking employment will continue to
be by "higgling" or by the "long jaw" is even offensive. These
latter terms have not had a connotation uniformly synonymous with
peace in industrial relations. Whatever be our sentimental attach-
ment to words, it is nevertheless obvious that the fundamental
distinction between the judicial types of industrial settlements is
the distinction between collective bargaining on the one hand and
the complete elimination of collective bargaining on the other
hand. Conciliation means peaceful mediation with the power of
ultimate settlement residing still with the two parties to the issue.
Arbitration is inconsistent with bargaining: the power of settle-
ment resides in the third party ; the terms must be obligatory
upon the disputants. Fundamentally, the distinction is not be-
tween conciliation and arbitration but between bargaining and
adjudication.
It is not my purpose to estimate the relative efficacy of each of the
judicial methods of industrial peace. From the standpoint of social
policy conciliation is a convenient and often a very effective means
of securing a meeting between a supercilious, often relentlessly inde-
pendent, employer and the willing representatives of a union of
employees, or between the representatives of a clamorous and often
vindictive and unreasonable union and a willing employer. But all
this has to do only with the way in which the machinery of col-
lective bargaining is set in motion. There is implied no distinct
wage theory. Not so in the case of arbitration. There the custom-
ary methods of wage determination are abolished. The essential
1 Industrial Democracjr, Vol. I, p. 222.
WAGE THEORIES IN ARBITRATION 697
characteristic is the binding award rendered^ not by the immediate
parties but by a supposedly impartial third party.
The word "arbitration" makes an initial sentimental appeal. It
speaks the language of distributive justice; it calls for the acme
of fairness between men. But practically it is doubtful whether the
arbitrator of an industrial dispute can convince even himself of
what is justice in any particular case. Equity is unluckily not self-
determining. With how much the more difficulty will he satisfy the
rival claimants! In the historical development of arbitration prac-
tice no criterion of justice has been generally accepted other than
the vague admission that the award must not be " contrary to public
welfare."^ The perplexity of an experienced, fair-minded arbitrator
is illustrated in Judge Ellison's determination of a wage dispute in
the Yorkshire Coalminers' case in 1879 :^
It is for [the employers' advocate] to put the men's wages as
high as he can. It is for [the men's advocate] to put them as low
as he can. And when you have done that it is for me to deal with
the question as well as I can. But on what principle I have to deal
with it I have not the slightest idea. There is no principle of law
involved in it. There is no principle of political economy in it.
Both masters and men are arguing and standing upon what is com-
pletely within their rights. The master is not bound to employ labor
except at a price which he thinks will pay him. The man is not
botmd to work for wages that won't subsist him and his family suffi-
ciently, and so forth. So that you are both within your rights. . . .
The rapid development of trade-unionism during the period from
the forties to the seventies, especially in Great Britain, and the for-
mation of employers' associations to combat the rising tide early
resulted in the development of irregular negotiations administered
largely through strikes. In many industries were instituted so-called
arbitration proceedings such as that cited in the above illustra-
tion. But for many years much of the arbitration was concerned
with voluntary award, essentially resembling conciliation. Where
iXJntil within approximately the past twenty-five years the principle of
arbitration compulsory by law was practically unknown. Its most elaborate
trial has been in Australasia, the modern laboratory of democratic social
experimentation.
*Webb, Industrial Democracy, Vol. I, p. 229.
3 Report of the South Yorkshire Collieries Arbitration, p. 49.
698 TRADE UNIONISM AND LABOR PROBLEMS
arbitration practice prevailed no formula or consistent theory of
wages was ever recognized to guide the determination. In the North-
umberland Coalminers' Arbitration case, for example, in 1875, the
operators demanded a 20 per cent reduction in wages. Their plea
was based on the rapid decline in coal prices since 187 1, evidenced
by "impartial" data drawn from the operators' accounts. Despite
the fact that the period before the year 1871 had been one of rapidly
rising prices and that wages always tend to lag behind prices during
such a period, the employers claimed that their profits for that
year (1871) were "fair" and "normal." To this the miners ob-
jected. They asserted that the policy declared by the operators
would force the employees to shoulder all the consequences of an
adverse market. They denied that the profits in 1871 were normal
and challenged the operators' main contention that the prices of
coal must fluctuate " in exactly the same ratio as wages in order that
the profits of coal owners may remain the same."^
The arbitrator in his decree in this case discarded all the princi-
ples advocated before him and made the award on a wage-fund
basis, a curious promiscuity of principles supposed to govern wages.
He found that wages had increased sipce 1871 ; that prices had
fallen. A reduction of wages of from) 10 to i2j/^ per cent was
awarded, but not because the current of prices was failing to
keep abreast of the increase in wages. The arbitrator found that
the number of men in the industry had increased. Where there were
now fourteen men there had been formerly but ten. From the " total
wages fund" he found therefore that each man could expect only
one fourteenth instead of one tenth. The award concluded:^ "The
restoration of economy in production cannot be brought about by
abating the rate of wages only, or indeed mainly, but must be accom-
plished by reducing the number of men."
During the next twenty years the emphasis shifted to the principle
of the sliding scale : that wages should be determined by prices. The
settlement of the proper basis and the administrative details of such
a scheme occasioned in many industries frequent resort to arbitra-
tion. The inherent tardiness with which wages followed prices was a
constant source of aggravation to employees during periods of rising
^Miner's National Record, Vol. VII; pp. 108, 109; reprint.
''Ibid. p. 109; also cf. seg.
WAGE THEORIES IN ARBITRATION 699
prices and to employers during periods of stagnation or of depres-
sion.^ The great stimulus to industrial arbitration and the extension
of the method of compulsory award have come, however, during the
last generation, from the advocacy of the "living" or minimum wage
as a first charge upon all industry. The unionist promulgators of
this doctrine in England, in America, and in the British possessions,
prompted by ideals of general social welfare tempered somewhat
with olass-consciousness, failed to take account of the economic
principle that in the long run general wages are fixed by prices and
not prices by wages. Yet the minimum wage, in so far as any such
has existed, has been the guiding principle in much of the recent
wage arbitration, especially in Australasia.
The indiscriminate way in which wage theories have been taken
up and discarded is attested by the recent American arbitration,
instituted in 19 10 under the provisions of the Erdman Act, between
the Order of Railway Conductors and the Brotherhood of Railroad
Trainmen as appellants and the Baltimore and Ohio Railroad as
appellee. This action resulted in the well-known Clark-Morrissey
award, the terms of which were subsequently extended to most of the
railroads in the Eastern territory. The unions in this case, as also
in the similar case three years later against all the Eastern railroads
for a still further increase, demanded rates of pay equal to those
paid in the Western territory. These were almost uniformly higher.
(i) In the name of standardization (that is, to abolish the
differential) ;
(2) On account, of increased cost of living;
(3) On account of increased risk, labor, and responsibility;
(4) On account of the increased productivity of the work of the
train crew ;
(5) On the ground that the profits made by the railroads in recent
years have increased out of proportion to wages .^
The unions urged the abolition of the differential between the
West and the East on the general grounds that "railroading per se
is worth just as much in one part of the country as in another."^
A minor exception was recognized in the case of the Rocky Mountain
territory.
^A. E. Suffem, Conciliation and Arbitration in the Coal Industry of America,
pp. 278, 279. 2 Award, p. 11. ^Ibid. p. 11,
700 TRADE UNIONISM AND LABOR PROBLEMS
The argument of the unions thus embraced a miscellany of wage
theories: (i) a "cost of service" theory, involved in equal sacrifice;
(2) a "standard of living" theory; (3) a conglomeration of "risk,"
"sacrifice," and ''value" .theory; (4) a "productivity" theory;
and (s) an "opportunity" theory, on the ground that the fruits
of prosperity should be distributed. The railroads contented them-
selves with contesting the claims of the unions. No new wage theories
were added by them to the list. How much the arbitrators were im-
pressed by the wage principles addressed to them is shown in the
statement of the theory underlying the award that " the employee will
be paid for all the service he renders, and the company will not pay
for any service that it does not get."^ In the later award of 1913,
involving the Eastern railroads, the arbitrators stated that although
they did not found their action entirely upon the increased cost of
living, they regarded it as basic.^
These instances are only illustrative of the nonsuccess of arbi-
tration precedents in establishing, after a generation's experience,
uniform theoretical standards for the adjudication of wage contro-
versies. Narrowly economic considerations have been confused in the
presence of broadly social considerations, and the class-conscious
representations of employees and of employers have been confused
with public welfare.
The conditions which confront the industrial arbitrator are com-
plex and often embarrassing. Finding no generalized precedents he
is compelled to adopt such unsatisfactory rules of procedure as may
seem suitable for the immediate case. He is furnished with con-
flicting data. Often none of the evidence is of disinterested origin.
The arbitrator cannot isolate the precise share of the value of the
joint product that is imputable to labor, nor can he determine the
value product specifically attributable to the capital. Of serious help
he gets none from the socialist who tells him that labor produces
the entire product. But little more is had from the economist who
assures him that the laborer produces what he gets.
Failing to secure from these sources any workable criteria, he
falls back upon the general principles of distributive justice. But
even here the perplexities are scarcely diminished. The arbitrator
^The Clark-Morrissey Award, p. 210,
2 Award, p. 34.
WAGE THEORIES IN ARBITRATION 701
must determine, for example, whether the industry can afford to pay
the increased wages that are demanded. Clashing interests do not
encourage agreement on such a question. What are " fair " wages ?
"fair" profits? Is the rate of profits, once it is determined, to be
applied to the par value or to the market value of the securities or
to some other base? Or may the arbitrator use his office to knock
the water out of inflated corporate issues? Shall the basis of rate
determination be the actual investment in the enterprise? or shall
allowance be made for subsequent changes, for example in the
general price level or the cost of reproduction of the plant? Is
good will entitled to profit? If so, in what proportion? The capi-
talization of an elastic, intangible asset, such as good will, can easily
be construed (as it unfortunately too often is construed) into a
social or ethical justification of the income itself from which this
capitalization is derived. Against such a form of ques,tion-begging
the arbitrator has often found difficulty in defending himself.
Even after these issues have been settled and the conflicting inter-
ests appeased the arbitrator finds that profits vary with the several
firms. The award involves, therefore, the determination of the
right and the expediency of maintaining in the field the least effi-
cient producers, whom the compulsory payment of higher wages
will drive out. Moreover, the arbitrator cannot estimate the practi-
cability of shifting the higher wages to consumers in the form of
higher prices. As an impartial outsider he does not know the busi-
ness intimately. Even if he did know it he could not forecast results
with assurance. The extent to which an increase in wages can be
shifted depends upon the character of the product involved: the
availability of substitutes, the elasticity of the demand for it,
whether the initial price was or was not a monopoly price, and
kindred considerations.
It is small wonder that the Anthracite Coal Commission, acting
in 1902 at the instance of the vigorous and withal the doubtfully
^ legal executive action of President Roosevelt, dechned to listen to
testimony concerning the ability of the several companies to pay
the wages demanded. It could not have satisfied itself, nor the
employers, nor the miners. The task of the Commission was the res-
toration of industrial peace. To this task it addressed itself. Upon
the companies devolved the responsibility of accommodating their
702 TRADE UNIONISM AND LABOR PROBLEMS
business to the terms of the award. The settlement was, however,
an avowed makeshift. The agreement was extended from 191 2 for
an additional four years, expiring March 31, 1916.
This brief catalogue of some of the important issues shows how
impracticable must be the judicial determination of an award or of
a series of awards uniformly consistent with the principles of distrib-
utive justice. In practice, in most cases and in most countries, the
umpire has abandoned the quest for a theoretically defensible deci-
sion. He often claims that he is confronted with a situation and not
with a theory. Demands and counterdemands he finds ; assertions
and denials; complaints and defenses. These are tangible. It is
impossible for both parties to be right ; nor can either be shown to
be wrong. In actual wage-arbitration practice in Australia, Europe,
and America the most widely used formula has been "split the dif-
ference." That this is so is the familiar impatient criticism thrust
at the Erdman Act in the United States. This eclectic process meets
with inevitable disapprobation from one side or from both. It has
been the frequent cause of public ridicule of the judicial methods of
industrial peace. In doing substantial justice to both parties the
arbitrator does strict justice to neither.^
As an instrument for the distribution of the social income arbitra-
tion has few consistent theoretical defenses. Yet practically all im-
portant awards have involved directly a wage theory of some sort
which can be isolated. Mr. Justice Higgins, the president of the
Australian Arbitration Court, in deciding the mine workers' dispute
in 1908 elaborately discussed the grounds for the award of increased
wages :^
Now, the first condition in the settlement of this industrial dispute
as to wages is that, at the very least, a living wage should be secured
to the employees. I cannot conceive of any such industrial dispute
as this being settled effectively which fails to secure to the laborer
enough wherewith to renew his strength and to maintain his home
from day to day. He will dispute, he must dispute, until he gets
this minimum. . . . Nor do I see any reason yet for modifying my ,
view of a living wage as expressed in the Harvester case (2 Comm.
_ 1 Because of general dissatisfaction with this unscientific method of splitting
differences, England has attempted to require in a large category of disputes
a Yes or a No, as in the courts of law, with no attempt to palliate both sides.
2The Barrier Branch of the Miners' Association Case, 1908, p. 13,
WAGE THEORIES IN ARBITRATION 703
Arb. Rep.) and in the Marine Cooks' case (2 Comm. Arb. Rep.). In
finding the living wage I look, therefore, to find what money is neces-
sary to satisfy the normal needs of the average employee regarded
as a human being in a civilized community.
To this theory of the "living wage" based on the prevailing stand-
ard of living the Australian court has tenaciously held. Asserting
that the requirement is primary of a wage sufficient "for the
healthy subsistence of an average family," the Court in the Barrier
Miners' case continued :
First of all, is an employer who is poor to be ordered to pay as
high wages as the employer who is rich ? Now, without laying down
a rule absolute and unconditional under all circumstances, I strongly
hold the view that, unless the circumstances are very exceptional, the
needy employer should, under an award, pay at the same rate as his
richer rival. It would not otherwise be possible to prevent the
sweating of employees, the growth of parasitic enterprises, the spread
of industrial unrest — unrest which it is the function of this Court to
allay. If a man cannot maintain his enterprise without cutting down
the wages which are proper to be paid to his employees — at all
events, the wages which are essential to their living-;- it would be
better that he should abandon the enterprise.
Mr. Justice Gordon, in the Brushmakers' case in Adelaide, said:
"If any particular industry cannot keep going and pay its employees
at least 7^. a day of eight hours, it must shut up." In the Collie
Miners' case Mr. Justice Burnside refused the application of the em-
ployers that the minimum wage be lowered: "If the industry can-
not pay that price it had better stop and let some other industry
absorb the workers."^
Again Mr. Justice Higgins defined the positive significance of the
living-wage theories in arbitration :
It is necessary to keep this living wage as a thing sacrosanct,
beyond the reach of bargaining. But when the skilled worker has
once been secured a living wage, he has attained nearly to a fair
contractual level with the employer, and, with caution, bargaining
may be allowed to operate.^
These excerpts represent the recent attitude of the important Com-
monwealth Arbitration Court of Australia. Its jurisdiction under the
16 W. A. Arb. Rep. 84, pp. 17, 18.
"Jbid. pp. 18, 19.
704 TRADE UNIONISM AND LABOR PROBLEMS
act of 1904 extends to the determination of wages, but only in those
cases in which interstate interests are involved.
The act providing for compulsory arbitration in New South Wales
was passed in 190 1. It was copied from the New Zealand law, and
its primary purpose was to stop strikes. In a letter to the special
labor commissioner of the state of California Mr. Justice Hayden
of the Arbitration Court seriously questioned the wisdom of any
compulsory substitute for collective bargaining:
If there are weak classes to be imposed upon . . . and to whom
it is in the highest degree just that a fair living wage should be
awarded, there are also strong unions able, without the assistance of
any tribunal, to win for themselves wages which rise as far above
a fair living wage as those of the sweated classes fall below it. To
take away from those men the weapon of the strike, and to impose
upon them the compulsion of a peaceful award, is to enter at once
upon difficulties of the gravest character.^
Whatever may have been the result in leveling down high wages,
there can be no doubt that the leveling up of low wages in New
South Wales has been even more apparent. In 1909, one year after
the passage of the Industrial Disputes Act; which, by the erection of
"industrial boards" to determine the conditions of employment in
specified industries, reenforced the terms of the Compulsory Arbi-
tration Act of 1901, the director of labor reported:
The opinion is fast gaining ground in industrial circles that greater
benefits are likely to accrue from the operation of the act than could
be expected from the methods of strikes. Strikes are rarely success-
ful in obtaining all that is demanded, settlements being usually in the
nature of a compromise. . . . Nor is this all. There are many of
the smaller and less compact industries in which the operatives could
hope for nothing whatever from a strike. . . . But under the act
they are in as good a position, and have equal opportunities with the
largest and strongest trades unions.^
Apparently arbitration has here had the effect essentially of in-
creasing the bargaining power of the weaker unions in the presenta-
tion of their claims to the Court. The institution in 1908 of the
1 Fourth Annual Report of Special Commissioner of Labor of the State of
California, pp. 3, 4.
2 See Report of Director of Labor to the Minister of Public Works of New
So'jth Wales, 1909, pp. 2 ff.
WAGE THEORIES IN ARBITRATION 705
industrial boards gave extended jurisdiction over industrial condi-
tions even before actual disputes had arisen.
It is interesting to note that the Department of Labor of New
South Wales has found many more embarrassing complexities arising
out of its attempts to secure standardization of wages in an industry
than have been admitted by the Commonwealth Arbitration Court of
Australia, cited above.^ The industrial conditions antecedent to the
passage of the Compulsory Arbitration Act of 1908^ are described
in the report for 1 908-1 909 of the Minister of Labor of New Zea-
land, in paraphrase :
Without question the arbitration act had excited disfavor. Even
discounting the expressions of disapproval of chronic industrial
malcontents the act was disagreeable to the great solid silent body
of laborers. The executive practice of granting permits to work below
the legal minimum wage and of granting exceptions to the operation
upon employers of the terms of the award, the desirability of restor-
ing function to conciliation boards, of terminating awards where
strikes against the awards had taken place, of authorizing the Court
to decline to make an award — these and other influences necessitated
a considerable change to conform the law to modern opinion.^
The administrative privilege and the elasticity allowed under the
old act of 1901 were the chief causes of its comparative failure. The
extension in 1908 of the principle of compulsion,* both as to reference
lE.g. Mr. Justice Higgins, in the miners' case referred to above, said: "It
is not difficult to see the danger to industrial peace involved when workmen
performing the same work, with the same skill, in the same city, are not receiv-
ing the same remuneration. So that when the . . . Company ask me to fix
by my award wages lower than are proper for the industry as a whole, and
adduces as its reason the fact that its mine is now poor, and is becoming
poorer, I cannot discern either justice or expediency in the request" (6 W. A.
Arb. Rep. 84, pp. 18, ig.
^Voluntary arbitration had been introduced into New South Wales in 1896.
Its total inadequacy led to the adoption in igoi of the compulsory principle
in an act due to expire by limitation on June 30, 1908. In igo8 was passed the
Industrial Disputes Act. Victoria inaugurated the wage-board system in 1896,
followed by South Australia in 1900, Queensland in igo8, Tasmania in 1910.
Compulsory arbitration was adopted in 1902 by Western Australia and in 1904
by the commonwealth of Australia.
'Pp. 2, 3, et seq.
-It is to be noted that even this compulsory arbitration act permits, under
very strict supervision, the payment of less than the legal minimum to old men
and to incompetents, because these are not " worth " the minimum to the em-
ployer. The value theory of wages is here finally lugged in at the back door.
706 TRADE UNIONISM AND LABOR PROBLEMS
and to award, to the determination of the conditions of employ-
ment in specified industries as well as to the determination of active
disputes referred to the Court has corrected many former inadequacies.
The powers of the Court and the range of their application have been
much strengthened by the recent Industrial Arbitration Act of 1912.
The grounds for compulsion in New South Wales were plainly of a
broad social and political character. Apparently no defense argued
for the passage of the act indicated that its sponsors were concerned
with or interested in its compatibility with consistent wage principles.
The initial guide in wage arbitration as practiced in Australia
has been the living wage to the industrially fit. This wage is held
to be a prior lien on the income of industry. The courts have occa-
sionally admitted that for the workers it constitutes only the start-
ing point. The men demand the living wage plus as much more as
they can secure. This is a relapse to a value basis after all. The
second principle is practicability : the wages bill must not be more
than the industry can permanently absorb.^ Third, the workers
usually demand much more than they expect to get. The resulting
practice is the compromise, to which attention has already been
directed. Fourth, the minimum wage established by arbitration
tends to become the standard wage.^ The economic theory of com-
pulsory arbitration as abstracted from the New Zealand precedents
has been ably reviewed by Le Rossignol.^ As applied to the dis-
cussion of wages, the principles there defined may be framed in the
following paraphrase : The competitive system and collective bargain-
ing have resulted in low wages, sweating, and strikes. Under the
sweating system the worker receives less than a decent living wage.
By the method of the strike force prevails over justice. Strikes and
other forms of industrial warfare discommode the public. Such in-
dustrial methods should be eliminated by an impartial judicial deter-
mination. This has usually taken the form of a legal minimum wage.
iThe practice of New Zealand has not evidenced so dearly as has that of
the Commonwealth Court of Australia the principle of submerging the industry
which cannot afford to pay "fair" wages. The latter looks to the elimination
of this form of industrial parasitism.
2M. B. Hammond, "The Australian Experience with Wages Boards," in the
Survey, Feb. 6, 191 5, p. 12.
S" Compulsory Arbitration in New Zealand," in Quarterly Journal of Eco-
nomics, Vol. XXrV (1910), pp. 682, 683.
WAGE THEORIES IN ARBITRATION 707
But if the standard wage is attributed to the proficient worker,
what provision is to be made for the superannuated or, more espe-
cially, for the relatively unemployable? Such are not "worth" so
much to the entrepreneur. Can the principle of the value of service
to the employer and the principle of a fixed legal minimum wage be
reconciled? These considerations^ lead to the circular reasoning
with which industrial arbitration has been charged:
1. The living wage is relative to the economic position of the
wage-earner.
2. The economic position of the wage-earner depends upon the
wage which he has been receiving.
3. The wage which he has been receiving depends upon the value
product attributed to the worker by the entrepreneur.
The living-wage theory, distinct from a value-wage theory, thus
defined and applied, is a begging of the question.
In venturing an estimate of the merits of compulsory arbitration
it must be noted that our laboratory has been confined, in the main,
to Australasia. Differences in industrial development between coun-
tries may be adequate to nullify conclusions drawn from so limited
territory. The comment of the Loitdon Morning Post of September
20, 191 1, is perhaps not wholly inappropriate or unwarranted:^
In theory the idea of making arbitration compulsory and depriving
employers and employees of the right either to lock out or to strike
is attractive to autocratic minds. . . . The enforcement of any such
law upon large bodies of disgruntled workmen is absolutely imprac-
ticable. To draw any analogy between the tiny disturbances of a
new country like New Zealand and the titanic upheavals among the
crowded millions of Britain's industrial workers is absurd.
Admitting, therefore, that its experience is not conclusive upon
the other countries, the result^ of the Australasian experiment with
wage arbitration may be summed up: (i) The wages system has
'■Among other social considerations are: The living wage "fair" for a single
man is insufficient for the married man. Is the state therefore to regulate mar-
riage and the number of children? Or is the married man to have a higher
wage than the single man? Then which one will "hunt" for a job when
times become less prosperous ? But the protection of which one is the more
Important socially ? Cf. ibid. pp. 684 ff.
^Quoted in U.S. Bureau of Labor Statistics, Bulletin No. 98 (1912), pp. 177-
178.
^Cf. Hammond, op. cit. p. 18.
708 TRADE UNIONISM AND LABOR PROBLEMS
tended to rigidity. The direction of development has been from
contract to status, or the exact reverse of Sir Henry Maine's juristic
ideal of human progress. (2) The marginal, the most inefficient,
entrepreneurs have obstructed wage increases. The New South
Wales Court, unlike the Commonwealth Court of Australia, has
usually made concessions to them. The unions, however, have
urged the ostracism of such inefficiency as unfit for survival.
(3) Wages during twelve years ending in 1907 increased 24 per cent ;
food prices during the same period increased 22.5 per cent. In only
a few cases has an industry been unable to absorb its wages out-
lay as fixed by arbitration.^ (4) Manufacturers are substantially
agreed that compulsory arbitration has increased the costs of pro-
duction. This cannot, however, be accepted as conclusive, since the
entire period under observation has been one of generally rising
prices. Dr. Victor S. Clark, formerly of the United States Bureau
of Labor and a careful student of state experiments in Australasia,
ventured the conservative opinion in this matter that "All regu-
lations restricting the freedom of employers in conducting their
business probably add to the cost of production."^ A well-known
arbitrator, since the passage of the compulsory law in 1894, stated
that, " with possibly one exception, industries have not been hampered
by the provisions of the act."^
It is a significant fact that wages in Australasia during much of
the recent period of rapidly rising prices have increased, contrary to
the general rule, as rapidly as, and during some years more rapidly
than, the cost of living has increased. Of course this condition in
the distribution of income has increased the workers' buying capacity
in local markets, and so contributed to general high prices. These
rising prices may yet prove to be a stumblingblock. The farmers of
New Zealand, for example, sell their goods in the foreign markets,
competing with similar goods produced in other countries where the
•iThis is the official claim of the colonial parliament of New Zealand: "We
can only add our personal testimony to that given by every careful investigator
into the circumstances of New Zealand, that there is so far no evidence of
injury to its industrial prosperity" (Industrial Democracy, p. xlvii (1902)).
2The Labor Movement in Australasia, 1906, p. 233.
3 Judge A. P. Backhouse in Report of Royal Commission of Inquiry into the
Working of Compulsory Conciliation and Arbitration Laws, Sydney, N. S. W.,
1901, p. IS-
WAGE THEORIES IN ARBITRATION 709
wages bill is relatively less heavy. What will be the effect upon
arbitration awards when the farmer finds the prices of his goods
limited by foreign competition and himself nevertheless compelled to
pay increasing prices at home is problematical.^
It has been often intimated, as has been pointed out above, that
ordinary arbitration precedents have been drawn from extraordinary
industrial conditions, such as have existed in Australasia. In the
main this is true. There have been numerous ir^ptances, however,
which afford due to the applicability of the principles of arbitra-
tion to American industrial society. A legitimate basis of compari-
son may be found in the "certain well-defined principles" governing
the wages determination in the dispute in 191 1 between the Western
Coal Operators' Association and District No. 18 of the United Mine
Workers of America :
1. A living wage is a necessity.
2. In mines operating under the same association and within the
jurisdiction of the same labor union, uniformity should prevail as
far as possible.
3. In the same mining camp equalization of wages should be
sought. After passing the limit of the living wage the financial
standing of the company should be considered.^
One of the serious flaws in the theory of wage arbitration is here
in evidence. The fallacy is not an unusual one. It is proposed that
there be equalization of pay. In the long run this can be achieved
only by means of an equalization of effort. Practice — and there are
many instances of this, for example, in recent New England indus-
trial history — has indicated that such a policy involves a process
of leveling down of skill. To so dangerous a program even the ardent
arbitration enthusiast must hesitate to lend his assent.
The fundamental general principle underlying industrial wage
arbitration has been that of the living wage. Grounded in social
policy, the living wage, usually in the form of a legal minimum
wage, has found its strongest support among the wage-workers.
1 Complaints of this character have been made in Australia and more recently
in New Zealand. Cf . Report of Victoria Commission on Operation of Factories
and Shops Law of Victoria, 1903, p. xxvi.
2 E.g. Report of Arbitration Board in Case of Grand Trunk Railway v. Its
Telegraphers, 1908.
7IO TRADE UNIONISM AND LABOR PROBLEMS
Primarily interested in social results, the wage-earner finds '^ only
minor concern in the immediate or direct economic effects, except in
so far as they too alter the broadly social effects. The employers, the
entrepreneurs, charged with the responsibility of the right propor-
tioning of factors, of the proper distribution of capital, of the many
technical adjustments incident to modern industry, generally have op-
posed as uneconomic compulsory wage arbitration, especially when the
award has taken the form of a fast legal minimum wage.^ The arbi-
tration precedents established by the Commonwealth Court of Aus-
tralia have been generally consistent with the fundamental underlying
principle. By charging the individual employer with the responsi-
bility of so setting his industrial house in order that he can meet the
charge imposed by the general wage award, it has, by policy, en-
couraged the survival of the industrially fit. "Let him save himself
who can ; and the devil take the hindmost." Exceptions to the
awards have been more customary in New South Wales where the
"normal" wage-worker is the standard, and to a less degree in
New Zealand. The tendency to grant such relief from the award
has been in direct proportion to the acceptance, in practice, of a
value theory of wages.
In the individual states of Australia, as distinguished from the
commonwealth, the judges have persistently disclaimed any profit-
sharing principle for their wage decisions. General consideration
1 English wage-earners on the whole favor the plan of arbitration. The op-
position is mainly that of the strong unions, which expect to win more by
direct methods. The points of their criticism are tersely stated:
"Too many conciliations end with a compromise which looks like six of one
and a half dozen of the other; . . . Clean-cut, straightforward, cold-blooded
business recognition of trade unions is worth volumes of arbitration schemes.
... We like peace, we want peace, we'll have peace if we are bound to fight
for it" (U. S. Bureau of Labor Statistics, Bulletin No. 98 (1912), pp. 184-18S).
2 The opposition of English employers to the scheme of voluntary arbitra-
tion as provided mainly in the act of 1896 has been crystallized into three chief
particulars: First, the judges, trained in the courts of law to decide cases on
their merits and not on grounds of expediency, are apt to bring to arbitration
the ironclad principles of the formal law. Second, the arbitrator, because he
does not have the responsibility of entrepreneurship, can afford to generously
indulge his social sympathies at the expense of the employer. Third, a serious
objection is the tendency to "split the differences." The workers put their
demands unwarrantedly high. The arbitrator reduces them one half and naively
congratulates himself upon his ingenuity.
WAGE THEORIES IN ARBITRATION 711
has been given, under the system of wage boards which prevails in
many of the states, to changes in cost of living. Custom has featured
somewhat in many of the decisions. The immediate guiding principle,
however, as distinguished in general from the arbitration precedents
reviewed in this paper, where the living wage has been most rigor-
ously enforced and concessions begrudged, has apparently been to
"charge what the traffic will bear." This return to value terms is
expressed in the following principle underlying an award by Judge
Hayden of the Court of New South Wales (by which the principle
of the living wage has been the less rigidly enforced), that the men
are given what in the Court's opinion they might have secured
without a court, considering their own strength and the resisting
power of their employers.'^ Stated otherwise, the Court's gauge has
been the amount which the Court thinks that the union could have
wrenched from the employer had it resorted to the direct methods
di the collective bargain or of the strike. But the general complaint
of employers in Australasia has been that the fixation of a minimum
wage by state arbitration, and especially by the wage boards, has'
compelled the entrepreneur to lower the wage of the more efficient
to compensate for the higher wages of the less efficient. The em-
ployers have often naively asserted that this process of general level-
ing down along with the general leveling up has been necessary, so
that the total wage budget might be in the "proper" or "former"
relation to profits. The minimum wage has thus tended to become
in fact the standard wage.^
Finally, it is to be noted that in many states where arbitration
practice has been most highly developed the state has challenged the
ethical and social justification of existing incomes. It has been
unwilling to accept the status quo as a necessarily valid starting
point. Unadorned economic theory does not always follow through
iP. Kennaday in Yale Review, Vol. XIX (1910), p. 41.
2 Professor Hammond has pointed out the important difference between the
wage fixed by a wage board and the wage fixed through compulsory arbitration.
The former, made compulsory, as a minimum, upon the employer but not
upon the employee, is not a standard and still less a minimum wage. The
latter, made compulsory alike upon employer and employee, tends to become
the standard wage. Accordingly, the essential difference between the wage-
board plan and collective bargaining is that in one case the bargaining is com-
pulsory, in the other voluntary.
712 TRADE UNIONISM AND LABOR PROBLEMS
the labyrinth of social amelioration. Theories of distribution give
way to ulterior considerations of immediate social policy. The state
of Victoria is definitely committed, for example, to the doctrine that
the government shall enforce the right of the workers to a legal
living wage. The New Zealand law and the precedents built upon it
commit the state to the vastly more comprehensive policy of the
redistribution of the income from private industry. The same is true
of Western Australia. This program does not appear today as the
inevitable outcome of a policy of compulsory wage arbitration. It
is fair to say, however, that such has been the positive tendency in
the great laboratory of modern social legislation, where the judicial
methods have become almost universalized in the settlement of in-
dustrial disputes. And it seems needless to point out that the
precedents of wage arbitration have been in the interests of the
human being, the individual worker, rather than in the interests of
industry for its own sake. It is not our task here to enter upon a
consideration of the validity of such a distinction. The principles
underlying wage arbitration have become not an economic theory of
distribution but a social theory of redistribution.
Among modern social students there has been a wide difference
of opinion as to the theoretical merits of arbitration as a device
for wage settlement. The persistent division of sentiment has made
the subject one of frequent controversy.
Mr. S. N. D. North, in 1896, gave expression to what is perhaps
the fundamental fallacy of the theories of wages in industrial
arbitration : ^'
The questipn whether wages ought to follow prices, or prices wages,
is one which boards of arbitration cannot determine. . . . We may
resolve and protest and insist, but it still remains the fact that the
living wage is only possible under conditions which allow the living
price. This is the A B C of industrial economics. . . . That is the
inexorable law which trade-unionism cannot repeal. If the wage
could make the price, it would never fail to do so. . . .
To the many questions propounded in the statement of the
problem of the wage theories in arbitration there is found in the
precedents no adequate answer. As a method of industrial peace,
1 Industrial ArbitraUon : Its Methods and its Limitations," in Quarterly
Journal of Economics, Vol. X (1896), p. 415.
WAGE THEORIES IN ARBITRATION 713
arbitration is intermediate, not final ; corrective, not remedial ; op-
portunist, not ideal ; an expedient for which the defense is to be
found in present social policy. From the narrowly economic point of
view, as contrasted — if such contrast be permissible — with that
of general social welfare, wage doctrine in industrial arbitration is
as lacking in theoretical justification as is the legal minimum wage,
the usual product of arbitration in practice. There is a fundamental
circle in the reasoning; throughout, a begging of the question. It
takes its place with the other cost-of-production theories of distribu-
tion. In judging, however, the usefulness of compulsory arbitration
as a device for the maintenance of industrial peace the reminder may
not be inappropriate that the "business of the labor arbitrator is
not to please orthodox professors of economy, but rather to find a
reasonable modus vivendi for two disputants who are unable to
find it for themselves."*
Wilson Compton
Dartmouth College
iW. P. Reeves, State Experiments in Australia and New Zealand, Vol. II,
p. 169.
XLII
MINIMUM WAGES FOR WOMEN ^
MUCH as has been said of late about minimum wages for women,
the questions raised have been dealt with but rarely in the light
of economic theory. Economists seem to have been wary of applying
to this concrete problem the general reasoning which figures so much
in the treatises. A reluctance of the same sort is observable in their
treatment of other current questions. What is the influence of
immigration on the general rate of wages ? What has economics to
offer on the controversy between closed shop and open shop ? What
is the effect of a protective tariff on the rates of wages ? The answers
to such questions should at the least be made easier by economic
theory; indeed, to aid in answering them would seem the ultimate
object of theory. Yet the economists have contributed much more
to the accumulation of facts, the ascertainment of details, than to
the elucidation of the broad, general problems. Perhaps this restraint
has been due to a consciousness that we are not sure of our ground.
Economic theory is in a process of readjustment ; our current for-
mulas must be regarded as provisional; some, at least, among the
next generation are likely to see new light in many directions.
The egregious errors of which the economists of the first half of the
nineteenth century were guilty when they applied offhand the theories
of their day impose caution. But there is no more searching way
of testing the generalizations of our own time than the attempt to
apply them, perhaps to use them as the basis of prophecy. And if in
the course of such applications our theories prove bad or useless,
the sooner we find it out the better.
In the following pages I shall endeavor to consider the legisla-
tive measures for regulating women's wages in the light of some
generally accepted economic principles. At the very outset let it
be noted that the problem is in essential respects different for women's
iFrom Quarterly Journal of Economics, Vol. XXX (1916), pp. 411-422.
714
MINIMUM WAGES FOR WOMEN 715
wages from what it is for men's wages. About minimum wages for
men nothing will here be said. And as regards women, the wages of
the lowest group only rieed be considered at this stage of American
discussion and legislation. A wider application of the minimum-
wages principle is of course possible — to the establishment of a
series of minima, for men and for women, and varying for the
several grades of labor. But it is to a single minimum, designed to
be effective for the lowest-paid grade of women's labor only, that
legislation is directed in the United States ; and the present paper
will be restricted to this sort of regulation.
The broad facts are sufficiently known. They have been admi-
rably set forth in compact form by Professor C. E. Persons in an
article recently published in these columns.^ Let me summarily
recapitulate them. The number of women and girls employed in
factories and shops is growing fast. It is growing particularly fast
in the occupations classed by the census under the head of "trade
and transportation," among which shops hold the first place for
women. Both in the factories and shops the great majority of the
women are young. Of all the women employed, at least half are
between the ages of sixteen and twenty-five ; among those who work
in factories and shops the proportion of young women is even greater.
It follows that they are a shifting class, industrial birds of passage.
One set enters the shops and factories and remains there a year or
two, at most a few years. Its members marry and are succeeded by a
new set. Though there are some older women in the group here under
review,— the lowest-paid group, — it is made up chiefly of the young.
And from their youth and the temporary nature of their work it
follows that in the main they are unskilled or inexperienced ; or, if
skilled and experienced, only in such tasks as can be easily learned.
Again, the majority of these girls and women live at home. They
are ordinarily members of a family group which makes common cause
in domestic life. As Professor Persons sums up the outcome of his
wide-ranging research : " It boots little to multiply illustrations. . . .
The typical female workers are the 80 per cent living at home and
contributing the larger part of their earnings to the family treasury.
Twenty per cent of the girls at most, are independent workers."
1" Women's Work and Wages in the United States," Quarterly Journal of
Economics, Vol, XXIX (191S)) P- 2°^-
7i6 TRADE UNIONISM AND LABOR PROBLEMS
Finally, current wages are low and are usually less than is reck-
oned necessary for the support of a woman living alone. As a
rough generalization it may be said that the wages of the young
women who constitute the bulk of those employed in factories and
shops range about $6 a week. Investigations by various commissions
lead to the conclusion that the minimum on which a woman depend-
ent on herself can meet "the necessary cost of proper living" (some
such phrase appears in the various statutes) is at the least $8 a week.
The usual wages of the great majority of women employed are less
than this minimum.
Here is presented the first general question, Are not the industries
which employ these women to be deemed "parasitic"? Is it not
clear that the women who receive but $6 a week, and need $8 for
self-support, must have the difference made up somehow? The
industries which employ them seem not to pay their way, and the
consumers who buy the products do not recoup the full expenses of
production. Is not the difference necessarily made up from some
other source — by parents, by charities, perhaps by prostitution?
This, as is familiar enough, is the ground most frequently urged for
fixing minimum wages for women. Such legislation, it is maintained,
recognizes an undeniable fact ; it puts an end to a clear case of
economic parasitism.
This version of the case has been stated so frequently and by such
careful thinkers and has been so little questioned — not directly
questioned at all, so far as I know — that one must hesitate to take
issue with it. And yet it seems more than questionable. It is not
clear beyond peradventure that the case is one of parasitic indus-
tries ; nor must the minimum needed for the support of the independ-
ent women necessarily serve as the basis for legislative regulation.
By a "parasitic" industry is meant, I take it, one which necessarily
entails some aid and payment from an extraneous source. The typi-
cal cases are those of industries employing adult^ who receive liter-
ally less than the bare physical minimum of subsistence. Such cases
have been brought to our attention by Mr. Rowntree and others
in inquiries on the wages of British laborers of the lowest grade.
Similar cases are to be found on the Continent, especially when the
handicraft labor of former days is in process of being displaced
by machine industry, the handicraftsmen clinging desperately and
MINIMUM WAGES FOR WOMEN 717
hopelessly to the ancient ways. Directly or indirectly the deficiency
below the minimum of subsistence has to be made up from some
source or other: through public or private charity, through higher
taxes or larger doles. The consumer does not pay enough to support
the poor creatures, and the general public, since it will not suffer
them to starve, must in some way or other make up the difference.
It is not necessary here to consider the question in its larger as-
pects. The phrase, invented by the Webbs, is in danger of being
overworked. The extent of strict parasitism is probably exaggerated.
The human frame can endure most wretched conditions ; the race
can propagate and maintain its numbers on very low terms. Wages
that we figure to be below the barest minimum prove not to be so.
Reference to parasitic trades occasionally gives an appearance of
calculating economy and of cool rationality to proposals which really
rest on something better and are to be justified on higher grounds —
sympathy with suffering and a will to put an end to it. But this is
by the way. Let it be assumed that there are in fact parasitic occu-
pations in the sense indicated. Are the low wages of factory and
shop women in this class?
The grounds on which they are supposed to be parasitic have been
stated often enough. Those who live alone, away from home or
without any home, do not get enough for support if they receive
only such wages as the majority get. This " if " is to be noted ;
for it is quite possible that the independent women, a minority of
the whole, are usually in the better-paid positions and are in the
main identical with the minority who receive as much as the mini-
mum for independent living. But of this more in another con-
nection. As regards the majority, who live at home, we are told
that their case is in no essential different from what it would be if
they lived independently. They do not get enough to support them-
selves. The difference between what they earn and what is needed
for their support is made up by other members of the family,
usually by their parents.^
II quote the following from the Fourth Report of the New York Factory
Investigating Commission, igij. The italics are mine. Professor H. R. Seager
says: "These unfortunates are partly supported now at the expense of others.
Otiier members of the family contribute something, charity contributes something,
prostitution contributes something, and some are slowly losing vitality and
such efficiency as they have left because they are constantly overworked and
71 8 TRADE UNIONISM AND LABOR PROBLEMS
The figures on which these statements rest are such as to arouse
suspicion on their face. The minimum of subsistence is put at
some such figure as $8. This, it is reckoned, the young woman
must have, even though she Uves at home. Now, it seems clear that
her mother needs no less ; the mother must have as much as the
daughter for food, clothing, shelter, incidentals. And the father
surely needs quite as much. For the three, then, we have $24 a
week as the minimum of subsistence. If the family consists of more
than three, a still larger sum is the minimum. But any such figure
is surely untenable, regarded as indicating what is absolutely
needed for "decent subsistence." An income of $24 a week means,
for a working-class family, not only ample subsistence but envied
comfort. To say that the girl who is a member of such a family
must have $8 a week for bare subsistence is tantamount to saying
that the family needs at least $24 a week; whereas this sum is
obviously much above the most liberally calculated minimum. An
income of $15 a week has been set down in recent discussions as the
sufficient minimum for the decent support of a family consisting of
father, mother, and three children under fourteen.^ This is a larger
underpaid. The industries that employ them have been characterized accurately
as parasitic industries. They do not pay their way, and consumers who get
goods cheaper in consequence are living at the expense of the sweated workers
or of those who supplement their earnings to save them from the disastrous
consequences of earning less than suffices for decent living."
Again, the Massachusetts Wage Commission, in its Report on Recommen-
dations of the Candy Makers' Wage Board, uses the following language (the
italics again are mine) : " In many instances their actual living expenses are
partly supplied by their fathers or other working male members of their
families; that is, the self-supporting industries in which the male members of
the family are at work are paying the cost of living not only for their own
workers but are supplying the deficits in the wages of the female workers in
other industries who happen to be in the families of their own employees. Cer-
tain industries, employmg large numbers of women livmg at home, are thus in
a manner dependent on other industries paying higher wages, and are enabled
to keep their pay rolls small because the actual costs of conducting business are
partially paid by other concerns."
iThe family minimum depends, of course, on the make-up of the family;
there is artificiality in the figures given for a "normal" family's minimum.
Needs vary at different stages. The young workman, just married, gets on
comfortably at the wages current. During later years, when children are half
grown, there is the most trying stage. Still later, when the children begin to
earn something, their earnings serve to ease the situation. A girl of sixteen
who has sisters and brothers still younger, and who gets $6 a week, contributes
MINIMUM WAGES FOR WOMEN 719
sum than is ordinarily got by the unskilled laborer or factory worker.
An income of $600 a year, or $12 a week, is in fact as much as such
a family can count on. But let the higher sum be taken for the
purpose of the present simple reasoning. The family may be re-
garded as the equivalent of at least three adults — the three young
children being counted as one adult. This means $5 per adult.
How can it be said, then, that the irreducible minimum for any
one adult is as much as $8 ?
Consider the situation from another point of view. Suppose that
into the budget of a family whose head earns $12 or $15 a week
a girl brings an additional $6. In a working-class family the differ-
ence between $12 and $18 a week is great; it is the difference be-
tween having hardly any margin at all and something like ease. It
means that the family is well above the poverty line. Is the girl who
brings in $6 a parasite ? Is she a drag or a prop ? Or suppose that
the young woman who has been bringing home $6 a week drops
from the family — dies or marries. The specific expenses entailed
by her presence cease ; her specific contribution to the family income
also ceases. Is the family better off or worse? Neither parent would
hesitate for a moment from answering that the family had lost, not
gained. Can it be maintained that the young woman is a parasite?
The view that any wages for women below the sum usually figured
as necessary for sole support — $8 a week or thereabouts — are
"parasitic" seems to me misleading as regards the home dwellers;
that is, as regards the overwhelming majority, the dominant constit-
uency. It is possible that even as regards the minority of lone and
self-dependent women the current calculations are somewhat more
liberal than is consistent with a strict minimum, or with the stand-
ards and ways of the class from which most women workers are re-
cruited. Persons habituated to higher standards find it difficult to
realize how bare are the absolute needs of those at the bottom ; and
the reckoning of a minimum of decent subsistence, when made by the
more prosperous, may easily bring the total above the sum which the
poor in fact find the minimum. But it is not chiefly on this score
that the usual figures of minimum subsistence are to be corrected
to the family more than her separate "keep"; and the inducement to push
into employment the oldest child of such a family — girl or boy — is over-
poweringly strong.
720 TRADE UNIONISM AND LABOR PROBLEMS
or reinterpreted; this correction — if there be any — might not be
serious. The main cause of the obvious discrepancy between the
minimum supposed to be applicable to all (home dwellers included)
and the smaller sum which in fact these home dwellers and their
families find a source of positive aid is to be found in another direc-
tion. The calculation ignores the economy of family life. Three or
five members of a family can subsist on an income which would not
suffice if each were to lodge and feed separately. The family is the
one permanently successful case of expense-reducing cooperation.
The girl who earns $6 a week and brings home that sum as a contri-
bution to the family earnings adds to the joint resources more than
she adds to the joint expenses.
It is best, therefore, to set aside the explanation of women's wages
from "parasitism" and to consider the situation without regard to
the implications of this phrase. That situation, as analyzed in the
preceding paragraphs, suggests a different and more tenable line of
explanation for the meager wages of these girls and women. The
circumstance that they live at home contributes immensely to swell
the numbers offering themselves in the labor market and affects
immensely the wages which they get ; and it also affects the indus-
trial quality of their work. Here we have what is, from the point of
view of economic theory, the crux of' the situation.
There is, I suppose, no proposition so universally accepted in
economics as that the remuneration of persons in any labor group
depends directly on the numbers in that group. It is greater if the
numbers are small, less if they are large. We usually try to state the
causal connection with more precision by saying that the reward in
any group depends on marginal desirability, or marginal service-
ability, or marginal productivity. Often we use the general phrase
marginal utility, applying the same terminology as in the theory
of value at large. Since labor in the last analysis yields simply
"services" or "desirabilities" or "gratifications," just as material
commodities do, the same principle holds. Often, too, stress is laid
on marginal "productivity"; and the working of marginal produc-
tivity is said to be the same for labor of any particular kind as it
is for labor at large or for the general rate of wages. On this last-
mentioned point I am disposed to make reservations. If there is
a determination of the general or average rate of wages by the
MINIMUM WAGES FOR WOMEN 721
marginal productivity of labor as compared with that of capital, it is
different in its mode of operation from the determination of the
wages of a given class of labor by the marginal contribution of the
class. But there is no need, for the purposes of the present discus-
sion, to consider whether this method of reasoning admits of sweep-
ing application. It suffices that the influence of an addition to the
supply of a particular commodity or a particular kind of labor is
agreed to be the same. As the total supply increases, the successive
increments become less prized, the price at which they can be dis-
posed of falls, and thus the price of each unit of the supply falls.
The business world calls this the operation of "the law of supply
and demand," or the determination of the price of a thing by what it
is "worth in the market." And it is a part of the same doctrine, of
course, that the marginal price is that at which the entire supply
can be disposed of. Fix a higher price and all cannot be sold ;
some units of supply not salable at the higher price will be pressed
on the market and will cause the price to fall. The marginal price
alone clears the market.
Now the general economic presumption is that when a given price
has come to rule in a market, it is the price fixed by the conditions
of that market. If the wages of a particular kind of labor are low,
as in the case of unskilled men, the explanation presumably is that
there are many of them and the marginal desirability of their labor
is small. If the wages of unskilled women are even lower, presumably
it is because the marginal desirability of their labor is still smaller.
Economists have speculated what consequences would ensue if ordi-
nary muscular labor were scarce — if only a select few could handle
the pick and the shovel and the plow ; how much their labor would
be desired and how high would be their wages ! ^ And we might sim-
ilarly make the hj^othesis that but few women were in the labor
market ; then, doubtless, it would appear that there were some tasks
for which they were peculiarly fitted and peculiarly desirable, and
the wages of the limited number would be comparatively high.
The number of women who offer their services in the market for
the particular kind of labor we are here considering is large. Be-
tween the time when schooling ceases and the time when marriage
ordinarily takes place there is a gap of some years. It may be
II refer to my "Principles of Economics," Vol. II, chap, xlix, sect. 7, p. 170.
722 TRADE UNIONISM AND LABOR PROBLEMS
disputable whether it is best that the women in this stage should
so preponderantly seek work; on this I shall say more presently.
But seek it they do. They are not only numerous, they are also
inexperienced; they offer unskilled labor; the marginal service-
ability of their labor is low, and therefore their wages are low.
Prima facie the explanation of their low wages is not in parasitism or
in oppression, but in a simple economic situation. Whether it is un-
just that their wages should be low raises quite a different question ;
precisely as the question of justice in regard to the going rate for un-
skilled men's labor is different from that of its economic explanation.
It seems to follow, further, that to set a rate of wages higher
than the going market rate will not accomplish the object in view,
or at least the main object desired; namely, to bring up to the
minimum all now employed at the lower rate. At higher wages not
so many can find employment. And while the number demanded
at these wages will be less, the number seeking employment is likely
to be greater. Professor Persons has remarked^ that a certain
number of womefa who are not now tempted to offer their services
in the market will be tempted by the better pay. With less numbers
demanded and larger numbers offering, there will be a selection of
the more desirable, a rejection of the less desirable, nonemployment
for a certain proportion. How large the proportion of unemployed
will be must depend on the conformation of the demand schedule ;
but unemployed there will be, and hence failure to accomplish the
desired object. Such seems to be the first and simplest application
of economic theory to the case.
There are, however, qualifications and questionings. As in every
economic problem, and above all in labor problems, we must try to
make our general reasoning complete as well as severe. In two direc-
tions qualifications or modifications need to be considered. First,
this labor is in demand not by itself, but jointly with other labor ;
and, second, it is peculiarly weak in bargaining power.
As is the case with almost every sort of labor, the conditions are
those of joint demand'. Few kinds of labor are demanded by them-
selves ; servants' work and analogous direct service are the most con-
spicuous examples. Almost every kind of labor given to fashioning
iSee the article already referred to in the Quarterly Journal of Economics,
Vol. XXIX, p. 2 28.
MINIMUM WAGES FOR WOMEN 723
bi vending commodities is employed in connection with labor of
other kinds. In the factory as well as in the shop the poorly paid
women are employed in conjunction with men of all grades of
skill and with women of the better-paid grades. Sometimes, as in
candy and brush factories, the women of the lower grades form a
large part of the labor force ; more often they form a small part. It
follows that often, indeed, usually, a change in the women's wages
makes a relatively small change in the employer's total wages bill
and makes an even smaller change in his total expenses. The per-
centage of increase in total expenses due to a rise in women's wages
to a minimum of $8 or $8.50 has been figured out for sundry
operations. Often it is a small fraction; the employer can easily
afford to pay ; how can it be maintained that any economic "laws"
stand in the way?
I am skeptical, none the less. The same reasoning would apply
to any one of the numberless factors that bear on the total expenses
of production. No change in any one item is likely to affect at once
the selling price of a product ; almost any added charge comes at
the start out of the employer's profits and does not cause him to
diminish the scale of his operations, still less suspend them. The
employer is the buffer ; it is through him that the impact of the
industrial forces is transmitted to the rest of the economic mecha-
nism ; the first effect is that he absorbs the shocks. All of which is
familiar enough. Yet we may be confident also — though this is
less often insisted on — that any change, even a small one, if it be
regularly repeated, has its influence on calculation and on outcome
and comes to have its effect on prices as well as on profits. In all
discussion of this kind we must distinguish between long-run and
short-run consequences; and it need not be said that those which
ensue in the long run are the more important. Now a sustained
prescribed increase in the wages of any class of labor acts like a
permanent excise or a continued rise in the price of materials. These
changes also do not immediately influence prices; they also may
form a more or less insignificant fraction in the total expenses of
production ; they too are absorbed for a while by one or another of
the chain of middlemen. Yet no one would pretend that all of them
or any one of them can be disregarded because the employer will
simply pocket the loss.
724 TRADE UNIONISM AND LABOR PROBLEMS
Still another consideration leads to skepticism as regards the
negligibility of the change. There is a large possibility of substi-
tuting other labor for that of the women. As in the case of a com-
modity, the resort to possible substitutes must be considered, as well
as the demand schedule for the commodity by itself. Higher wages
for the unskilled women are likely to lead to more or less replace-
ment by men, skilled or unskilled. Like the factor considered in the
preceding paragraph, this one exerts its full influence only in the
course of time ; nor is it possible to say how great the influence will be.
It would seem tolerably certain that at sundry points in the line of
"marginal" employment the existing equilibrium will be upset and
rearrangements made in the combinations of different sorts of labor.
At this point it will be appropriate to consider another turn which
the discussion often takes — one which also is supposed to point
to the conclusion that the advance of all women's wages to the
proposed minimum will be inconsequential, or at least will have no
consequences outside the particular industry or industries. It will
simply lead, we are told, to greater efficiency. Sometimes it is said
that the employers will mend their ways and improve their processes ;
sometimes that the women themselves will become more efficient.
Are there grounds of general reasoning or general experience for
expecting results such as these?
The effect of legislative pressure (or other pressure) in inducing
employers to adopt more efficient processes has been insisted on
in various directions. A conspicuous recent illustration in this,
country is the contention that railways can meet heavy expenses
or make up for low rates by bettering their transportation methods..
Protected manufacturers, again, are often told that they can meet
more severe foreign competition, resulting from lower tariff duties,,
by improving their processes or by better management. And so as
regards minimum wages, whether for men or for women. Now in all
these matters the presumption seems to be against the fulfillment,
of the optimistic expectations. Improvements in the arts come:
from the most various sources and in the most various ways. All
sorts of possibilities are constantly being pressed on industrial man-
agers. The inducement to secure an increase of profit or a lessen-
ing of loss is always keen — as keen, it would seem, as the range
of intelligence and enterprise in the managing classes makes possible.
MINIMUM WAGES FOR WOMEN 725
It is not to be denied that improvements are sometimes intro-
duced under conditions of stress. The question is not whether this
sometimes happens, but whether it usually and normally happens —
whether there is a distinct tendency that heavier burdens will be
more easily borne because of the concomitant development of
greater strength. The proposition seems to me highly disputable.
Perhaps there is a tendency to put into effect in hard times improve-
ments already known, but neglected in the days of abundant profits.
On the other hand the stimulus to invention and progress is the
prospect of making money and the sight of others making money.
This is the case above all for those improvements in plant and
machinery, involving heavy investment, which have been the most
effective among the causes of material advancement. The problem
is one of wide range ; it raises far-reaching questions about the psy-
chology of money-making and of invention ; but surely it is the
bait of profit rather than the threat of loss which has been the great
motive factor in bringing about better plant, new machinery, more
effective organization, increase in the productivity of industry.
A somewhat different contention on this score is that the employees
themselves will become more efficient because of higher wages —
stronger physically, more alert, perhaps more intelligent. Will this
really occur ? Needless to say, we must bear in mind here also the
general situation, not individual cases. If a single factory or shop
raises wages above the usual rate, it is likely to get the pick of the
labor supply and may find that the higher wages are so much offset
by better work that they cause no loss, indeed, prove to be a source
of added gains. But all factories and shops cannot do this unless
all employees become more efficient by virtue of getting higher pay.
To say as much as this is to hold the steam-engine theory of wages —
to maintain that just as more power is got by putting more fuel
under the boiler, more labor power is got by putting more wages
into human beings. Among theorists the late Francis A. Walker was
the first conspicuous proponent of the doctrine, which, since his day,
has appeared sporadically in recent economic discussion. This much
of truth there seems to be in it : better feeding sometimes causes men
and women to be physically more robust ; better training causes them
to be more intelligent — if the training be really better ; better con-
ditions may cause them to be more alert and ambitious. These good
726 TRADE UNIONISM AND LABOR PROBLEMS
effects may come from higher wages. Just how they come and how
soon, and under what conditions, and with what certainty, cannot be
said with any assurance. There is a complex of causes, a series of
interactions, a difference between short-time and long-time effects.
Much depends on the elimination of that portion among the workers
—perhaps no small portion — who by nature or environment are
incapable of responding to uplifting influences. Much depends on
the intelligence with which the influences are guided — on the use
of food and drink that are really nutritious, on education that is
really helpful, on social conditions which in fact arouse alertness.
As a general proposition, it would probably be nearest the truth
to say that higher wages are ordinarily not the cause of greater
effectiveness in industry, but its result; while yet it is true that
under favoring conditions higher wages may also be one among
causes of slowly developing effectiveness. The influence of better
pay on efficiency is neither certain nor calculable; still less is it
immediate.
In the main we must face the probability that higher minimum
wages for all the women affected will lead to readjustments extending
beyond the industries themselves. They are not likely to be absorbed
in the profits of employers simply because they constitute only one
among the expenses of production. Neither are they likely to be
offset by an increase in efficiency, certainly not by a corresponding
and calculable increase. They seem likely to lead either to lessened
profits or to higher prices of goods. Either consequence leads, again,
to some curtailment in the scale of operations or some employment
of others to take the place of the women. Optimism about its mak-
ing no difference after all should not blind us to these probabilities.
Turn now to another phase of the discussion. Are not the low
wages of the women exphcable simply on the ground that they are
weak bargainers? Must not theories of marginal serviceability or
vendibility be applied with extreme caution to such cases as these ?
Is there not mere exercise of power on the part of employers, to
be counteracted by the exercise of power on the part of the state?
In the books on economics we are constantly talking about the hand-
icap placed on the workman by his lack of reserve funds, by his
ignorance, by the perishability of labor, by the stress of need.
Hence the occasion for labor organizations and labor legislation.
MINIMUM WAGES FOR WOMEN 727
Are not these considerations applicable with special force to the work
and wages of women? '
Beyond question the group of women receiving low wages are
peculiarly weak in bargaining power. They are young, timid, igno-
rant ; they are a shifting class ; they are easily browbeaten and
bullied. Further, they are hampered as regards mobility. Since they
usually live at home, they cannot seek work far from home and are
under pressure to accept whatever wages are offered on the spot.
General reasoning does not seem to be of much promise for ques-
tions of this sort. Such so-called "exceptions" or "qualifications" in
the working of economic "laws" would appear to call for pains-
taking inquiry on the facts in each particular case, and for that sort
of inquiry only. And yet there are some clues of a general char-
acter. Low wages due to mere weakness in bargaining may be ex-
pected to be accompanied by other phenomena. One of these —
perhaps the most significant— is unusual profit by the employer.
If his gains — due allowance being made for risk, order of ability
required, and so on — are not above the usual or competitive level,
he cannot be said to take advantage of the employees' inability to
bargain; he succumbs to the force of the market conditions. Low
wages in that case are concomitant with low prices of the product ;
they are not a cause of "sweater's" profits. And low prices of the
product are then the result of market conditions, of consumers' de-
mand. If goods can be competitively sold only at a low price, the
cause is that there are many of them as compared with consumers'
estimates of their desirability; and then the explanation of low
wages is to be found in that ultimate source already indicated —
the marginal serviceability or vendibility of the particular kind of
labor, and therefore in the numbers offering it in the market.
This sort of reasoning could be used with little hesitation if we
had to deal with a simple case. If there were one kind of labor
turning out one kind of product; if we found, for example, that
women alone were employed in the making of candy; and if we
found, further, that the employers took no more than the competitive
capitalists' toll on the goods passing through their hands, — then we
ghould not hesitate to say that if low wages are paid to the women
they must be due to the low price at which the goods are sold,
not to oppressive exercise of bargaining strength by the employers.
72 8 TRADE UNIONISM AND LABOR PROBLEMS
The actual cases are, as I have already explained, highly complex.
The women are employed in conjunction with all sorts of other
workers, and their wages are but one link in the whole chain of
expenses of production. In the constant irregularities of prices and
projfits, in the partition of successive stages of industry between dif-
ferent groups of producers, there is room for bargaining power of
which the consequences are not easily traced.
There is not, so far as I know, any body of evidence to show that
profits in all or most of the industries which employ a considerable
proportion of women are unusually high. It is often enough con-
tended, indeed, that the profits are such that the proposed increase
in wages can be afforded or would make little difference. But this is
not' the same as to say that the existing scale leads in the majority
of cases to profits exceptionally high. It is probable that exceptional
gains from low wages of women do come under some circumstances ;
for instance, when an industry first betakes itself to a district where
this sort of unskilled labor is abundant. Thus silk mills, in which
light machinery almost automatic in operation has been introduced
of late years, have moved to the anthracite district of Pennsylvania
and have employed with profit the grown and half-grown children
of the miners. Candy-makers have similarly planted themselves in
the heart of city factory districts. Those who took the first steps in
such utilization of labor supplies very likely " exploited " them also —
paid low wages and made high profits. Like other changes in the
localization of industry, they would feel the leveling influences of
competition only after the lapse of a considerable time. Yet transi-
tional conditions of this sort are not the t5^ical ones. Women's
low wages are found for long periods in all sorts of places and in all
sorts of industries^ in cities and in regions where they have been
employed for generations, in old industries as well as new. There
is no evidence indicating that unusual profits have been reaped
thereby over a wide range of industries. So far as this sort of evi-
dence goes there is little to suggest that the low wages have been
caused merely by bullying.
There is still another direction in which we may look for evidence
of exploitation. If there are particularly low wages in one estab-
lishment among others of the same kind, or in a few among a con-
siderable number, there is ground for suspecting that a "fair"
MINIMUM WAGES FOR WOMEN 729
market rate has been depressed by taking advantage of weakness.
Cases of this sort were found in the investigations of the Massachu-
setts Commission on Minimum Wages and in those of the New York
Factory Investigating Commission. Variations from region to region
(not from establishment to establishment) may constitute evidence
of the same sort ; here, however, to be used with caution, since local
variations of wages are common and are usually due to other
causes than mere exercise of bargaining advantage. Standardization
and a common rule would seem to be peculiarly called for ; and it is
somewhat surp.rising that comparatively little has been made of
circumstances of this sort toward strengthening the arguments for
legally enforced minimum wages.
On the whole, the general indications do not lead me to believe
that the factor here under consideration — weak bargaining power —
is the chief one to bring about the low wages of women. No doubt
it intensifies the situation. It stands in the way of organization,
of mobility, of a holding to the market rate, of response by actual
wages to conditions tending to raise the "current" market rate. It
causes much to depend on the temper and character of the individual
employer, especially as regards matters accessory to the main wages
bargain, such as overtime payments, penalties and fines, charges for
materials and for breakage. But the great outstanding fact in the
situation — the low rate of wages which is found year after year
over a wide range of industries in all parts of the country — would
seem to be explicable only on other and broader grounds.
The fundamental cause, we are forced to believe, is in the numbers
of those seeking employment. A,nd these numbers are part of the
mass of unskilled workers whose pressure for employment so pro-
foundly influences our industrial and social conditions in every direc-
tion. The low wages of factory women are indissolubly associated
with the problems of immigration. The constant recruiting of the
rank and file of unskilled workers by the inflowing army of immi-
grants keeps wages in this bottom range peculiarly low in the United
States. Though wages are higher than for the same class in the
countries whence the immigrants come, they are low relatively to
the general American scale of income and prosperity. It has often
been remarked that the gap between the wages of skilled and un-
skilled labor is in the United States greater than elsewhere —
730 TRADE UNIONISM AND LABOR PROBLEMS
greater than in old countries like England and Germany, greater
than in Australia (a new country whose conditions are not unlike
our own). Relatively, the American day laborer and factory hand
is not so well-paid as the skilled mechanic or the farmer. And the
explanation is that the continued immigration of vast numbers has
kept the bottom-wages group full and overfull. I will not undertake
here to consider whether the average rate for all American laborers
of every kind (including farmers) has been lowered or raised in
consequence of immigration — whether the total national dividend
per worker has become smaller or larger. That difficult question,
as I noted at the outset, has been argued by the economists as spar-
ingly as other general questions on which theory might be expected
to facilitate the answer. But as regards the wages of the particular
class here under discussion — the ordinary unskilled manual work-
men— the influence of immigration seems beyond dispute. Every-
one knows that throughout the manufacturing and urban districts
most of these are immigrants and the rest mainly the children of
immigrants, and that the iminigrant population sets the wages stand-
ards for the entire group. It is their large numbers and the con-
stant recruiting of their numbers that cause wages to be as low
as they are.
And it is their daughters who constitute the great army of women
workers competing for employment in factories and shops. The
wages which the parents get attract them in great numbers to the
United States ; the wages which the young women get attract them
in great numbers to the shops and factories. The multitude which
thus bids for employment in the entire field brings about current
rates of remuneration which serve on the whole to " clear the market."
Rates distinctly higher would cause more appKcants to offer their
services and would cause less to be employed. The economic theory
of the case is simple : the only effective remedy for the low wages
of a particular class of workers is a decline in the numbers offering
themselves for the particular sort of employment.
When it is said that higher rates of wages would cause less to
be employed,— that the demand (that is, the number demanded)
would be less at a higher rate than at a lower, — the proposition must
be taken in the same sense and with the same qualifications as in
the case of a commodity. Much depends on the closeness of the
MINIMUM WAGES FOR WOMEN 731
connection with the consumers. A rise in the price of sugar, for
example, has its effect in reducing the quantity demanded with prompt-
ness and almost with calculable extent. Similarly, a rise in the wages
of domestic servants — an increase, say by legal requirement, of 25 per
cent over the rates now current — would lessen the number em-
ployed with promptness and, I should suppose, to a considerable
extent. A rise in the price of wool, on the other hand, would be
transmitted to consumers through the cloth manufacturers and the
clothing-makers and the wholesale and retail dealers ; the effect
would be slow in reaching consumers and might be obscured because
of the simultaneous influence of other changes ; it would probably
be complicated by some resort to substitutes for wool. In the same
way, a rise in the wages of women in paper-box factories would also
have to reach consumers through the effect first on the box manu-
facturers and then on the other producers and merchants who are
the first purchasers of the boxes, and it too would be complicated by
the possible substitution of other workers for women and by that of
other wrappings in place of boxes. The essential question is about
the slow-working influence of continuing pressure. As regards both
the wages of women and the prices of boxes we must consider the
consequences not of a sporadic change here and there but of one
affecting all enterprises throughout the country. What would happen
if legislation should try to apply to the wages of all women a mini-
mum of, say, $8 a week — the sort of standard rate that is commonly
proposed ?
The answer to this question on general reasoning would seem
clearly to be that not all the women would continue to be employed.
The numbers offering their services in the market would rise ; it
is a peculiarly elastic kind of labor supply. On the other hand, the
number demanded in industry at the higher rate would be less. The
more efficient (or more tractable) would be culled out and first
employed. Others, of the common run, would be retained in certain
operations for which they were serviceable and profitable even at the
higher rate. But there would be a residuum — how large a proportion
it is impossible to say, but doubtless considerable — not employed
at all.
E(ut here still another question presents itself. Perhaps it is
desirable that a certain number — conceivably a large number—
732 TRADE UNIONISM AND LABOR PROBLEMS
should be thrust out of employment. Those so affected would be
the less efficient and less serviceable. One of the outstanding aspects
of the situation is the large number of young women who work
fitfully and sporadically, drifting from job to job. They have no
training, no vocational skill, no ambition. They earn something
during the busy season arid do little or nothing at the slack periods.
Their presence and their availability during the busy times tend to
accentuate the irregularity of industry. Hence the suggestion that
they be deliberately kept out of the working ranks. This could be
accomplished by two measures : first, raising the age at which em-
ployment shall be permitted, say from sixteen years to eighteen;
and, second, forbidding absolutely any employment at less than the
"living" wage and thus automatically shutting out those not em-
ployable at that rate. To such a policy there would admittedly have
to be added something more — provision for the further and better
education of this class, not only for higher culture but for industrial
and domestic work.
The program is attractive; it cannot but command sympathy.
But the difficulties in the way must not be underrated. An effective
remodeling of the educational system of a community is a most
difficult thing to bring about— ^ not only difficult to plan and pro-
vide but difficult to fit into the wishes, the habits, and, not least,
the needs of the backward constituency. Such a readjustment as is
contemplated means a great extension of secondary education, a
complete overhauling of its content, an immense increase in the
number of pupils. It means further that the period during which the
young women must be supported by their parents is lengthened, and
lengthened, too, at the time when the separable expenses of main-
taining them have reached the maximum. The economic strain must
be great so long as the current wages of men (heads of families)
remain at their present level. It would be necessary to reckon with
the pressure to reach the stage of earning something, the temptation
to evasion, the unpopularity even of well-devised uplift education —
not to mention the inadequacy of the traditional ways of secondary
schools, so tenaciously clung to by the teaching profession and the
school authorities. The road to be traveled is a long one, and for
a considerable time the situation must be dealt with as it is, not as
we wish that it may come to be in the future.
MINIMUM WAGES FOR WOMEN 733
A further difficult question remains. Assume that the fitful,
untrained, indifferent women are got rid of ; that all who offer them-
selves for work at the age of, say, eighteen years have had an indus-
trially helpful education ; assume that all the workers in the market
are in this sense efficient, — will all of them then be able to get dis-
tinctly higher wages than are now current ? Perhaps ; but not cer-
tainly. General economic reasoning would suggest that wages depend
not on personal efficiency but on the numbers possessing the effi-
ciency; that is, on marginal effectiveness or serviceability. Double
the numbers of a group of workers having a given training, and their
wages will go down even though their training has been excellent.
The net usefulness or effectiveness of any one such worker becomes
less. And even if you maintain the numbers of a given group at
the same figure, and improve the training and personal efficiency of
all, their wages will not necessarily rise. To make effective the new
potentialities there must be different organization and different equip-
ment— a response in the managerial situation. The whole problem
of the relation between vocational training and individual skill on
the one hand and industrial output on the other is a tangled and
troublesome one. I will refer here only to one common source of
error and of undue optimism — a confusion between the effect of
trade training on an individual and its effect on an entire group.
Equip a single boy or a few boys for a well-paid trade, and higher
wages will be got by these few. Equip a great many boys for such
a trade, and the rate of wages in the trade may go down. Compu-
tations are sometimes made of the profitableness of trade training.
It is figured out that the return in enhanced wages, compared with
the expense of education, amounts to a magnificent profit on the
investment. But it is forgotten that if a multitude get the training,
the wages will be much less enhanced, conceivably not enhanced at
all. Equip a small or a moderate number of young women for skilled,
responsible, steady work, and they will get higher pay than before.
Equip all the young women of the same class and the same age-groups
for such work, and they will get pay not so much higher, conceivably
not higher at all. The same proposition holds good here as in the
cases of new machinery, great inventions, improved organization,
scientific management. When confined to a few, and during the
earlier stages, all these bring profit to the producers; when of
734 TRADE UNIONISM AND LABOR PROBLEMS
universal application they redound to the benefit of the community at
large, and the producers get their share only as consumers and only
to the same extent as other consumers.
In the preceding pages attention has been given chiefly to the
case of the women who live at home and are members of a family
group — the great majority. What of the minority — one quarter
or one fifth of the total — who do not have the advantage of family
life and family cooperation, who must make their own budget ?
Information about the condition of these self-dependent women
is not as full as could be wished. It seems probable, however, that
not many of them are in the lowest-paid group. Their wages appear
to be usually above the lowest rates and above the average. The
women who must make their way alone are in the main identical
with the minority who get the better rates of pay and earn enough
for independent living.^ This result is, indeed, to be expected. The
stress of need leads to more sustained exertion, more professional
exertion, so to speak. In the opinion of well-informed and sympa-
thetic observers there is no good ground for the impression that it
is prostitution which serves to eke out the receipts of the single
woman. The connection of prostitution with low earnings is undeni-
able and, indeed, obvious, but the connection runs through the entire
stratum of the poor and is not especially noticeable in the case of the
women quite dependent on their own exertions. These seem usually
to earn enough to get along and are no more likely to sell themselves
than other women of similar antecedents and environment.
But, when all is said, the lot of the lone woman is hard. Among
them there must be no small number of individuals whose case is
pitiable. Their situation, like that of the women who have to support
other dependents, brings out sharply and sadly the conflict between
the two opposing principles of justice in distribution — the principle
of need and that of efficiency. Our system of private property and
competitive wages and prices bases earnings on the latter principle :
to each according to his contribution. The insistent altruistic senti-
ment, the feeling of the larger self, rebels recurrently against the rigor
of the established rule and would mitigate it or replace it by the
^This conclusion — better stated to be an impression — I derive from con-
versation with social workers, members of commissions, and others close to the
situation. Further inquiry on the point is much to be desired.
MINIMUM WAGES FOR WOMEN 735
other : to each according to his needs. So it is as regards the lone
woman, the widow who has children to support, the older or younger
woman who is the sole prop of a forlorn family. The need is great,
even though efficiency be slight.
Unfortunately, a prescription of minimum wages on the basis of
"proper" independent support — the elimination of what is called
parasitism — would not be specially effective in helping these women.
They might or might not be among those retained in work, might or
might not be among those left unemployed. I cannot but believe
that for them we must turn to other measures, both palliative and
curative. For the younger women, beyond question, we need helpful
education and helpful extension of the period of training. To them,
also, charity can be extended, particularly in the provision of decent
lodging at prices within their means. Among their problems that
of proper housing seems to be quite the most serious — morally, as
well as for mere shelter and space. I can see no better opportunity
for the S3mipathetic spirit than in well-devised accommodations for
this special class. For the older women, widows' pensions, dependents'
pensions, infirmity insurance, — the various forms of wide provision
by public authority for unavoidable calamities, — loom up among
the desiderata of the future. The feasibility of all such legislation
depends on the perfecting of political and administrative machinery
— a most urgent task, difficult to achieve, inextricably bound up
with all the defects of democracy, deserving the attention and the
devotion of the social reformer.
The preceding discussion seems to justify a warning that there is
need of going slow in the regulation of women's wages. More par-
ticularly there is need of caution in applying as the standard for
determining all wages the amount needed by the independent women.
The "parasitic" interpretation of the situation is unwarranted. The
women workers are not a drain on their families, or on other indus-
tries, or on the community at large. It is precisely at this point
that the campaign now being carried on in the United States is
vulnerable. I cannot but believe that an attempt to apply on a
sweeping scale the principle of abolishing "parasitism" must before
long break down in practice. The real question is not whether the
young women fail to contribute anything to their families or to the
national dividend, — they do contribute, — but how their contribution
736 TRADE UNIONISM AND LABOR PROBLEMS
can be made larger and how they can secure a larger share of
the national dividend. The plain facts of the situation must be
faced. The immense majority of women who work in factories and
like employments do not need as a minimum any such wages as the
commissions now at work are asked to prescribe. To prohibit their
employment except on this basis — to require that every woman at
work should receive some such sum as $8 a week — would not bring
about the employment of all at any such rate, but a reduction of the
number employed and a failure to attain the desired end.
This by no means leads to a rejection of public regulation or a
denial of the usefulness and desirability of wage boards. The con-
siderations adduced in preceding pages do not point to the good old
policy of laissez faire. It may well be that there is need of regulating
and protecting the wages of women and of prescribing minimum rates
for those in the lowest group. The conditions of their employment
are such as to lead easily to "unfair" wages — wages kept low by
taking advantage of timidity, ignorance, lack of mobility, lack of
bargaining power. The lack of standardization and the divergent
rates of pay under similar conditions point strongly to haphazard
influences of this sort. Collective bargaining through organization,
difficult enough for the more independent and better-trained women,
is almost out of the question for the lowest group. A public commis-
sion can act as a regulating and standardization body, striving to
eliminate the wage-depressed employee and bringing about the best
terms which the social and industrial situation as a whole permits.
And such a body, by the very fact of its existence, must be expected
to exert its influence for the mitigation of the lot of the poor and
weak, and therefore, within the debatable zone, for an upward trend
of wages. Its aim must be to press up, not to keep down.
It may be asked what standard a wage board can set up if no
absolute minimum is to be applied. The single-woman minimum is
calculable and ascertainable — something on which figures can be
got and a precise basis for action secured. How fix a minimum for
the girls and women whose expenses are to be allocated in a family
budget? The task would seem to be as hopeless as that of ascer-
taining the separate supply price of one among a group of commodi-
ties produced at joint cost. The answer must be that the problem
is difficult and that no simple rule is at hand for solving it. A
MINIMUM WAGES FOR WOMEN 737
wage commission or board not committed to the standard of sep-
arate support would have to proceed by rule of thumb — by stand-
ardizing rates of pay not very greatly removed from those found
in representative establishments of better grade and watching how
the prescribed rates operate from time to time. It would have to
proceed cautiously and slowly, even though sympathetically. Virtu-
ally this is what every wage board does, whatever the supposed
basis of precise action. We make pretenses when we say or imply
that there are rigid principles on which to rest such determinations.
Even for men minimum wages or minimum expenses of living are
in reality shifting and relative things. The supposed fixed amounts
vary from place to place and from generation to generation. It is
all in the domain of opportunism.
F. W. Taussig
Harvard University
XLIII
AMERICAN MINIMUM-WAGE LAWS AT WORK^
TO THE uninitiated student of American standards of living
minimum-wage legislation in this country presents a strange
anomaly. On the one hand is the continually announced and appar-
ently accepted dictum that for the woman worker a fair wage must
be a living wage ; that anything less than that constitutes exploita-
tion and parasitism on the part of the industry engaging her ; and that
to uphold such a living standard among those whose bargaining
power is weak, minimum-wage laws are universally to be enacted
and administered. On the other hand is the inescapable fact that
of the fifteen states already having minimum-wage laws upon their
statute books only three have in operation any rulings of wide
application that the scientific student of minimum standards could
term at all adequate. Eight have a series of substandard rulings,
and the remaining four have none at all.
It will be the task of this paper to set forth some of the reasons
for this anomalous state of affairs, to point out the difficulties under
which our minimum-wage commissions are laboring, and to suggest
certain principles of drafting and administration that might bring
our practice into closer conformity with our announced theory.
I. CHARACTERISTICS OF THE FIRST MINIMUM-WAGE
LEGISLATION, AUSTRALIAN AND BRITISH
The origin of minimum-wage legislation is to be sought not in
this country but in England and Australia. Familiar as this fact
is, its significance appears to have escaped popular attention. The
first rudimentary organs of minimum-wage administration were the
District Conciliation Boards of New Zealand, established in 1894 for
the compulsory arbitration of labor disputes. Incidental to their
^From American Economic Review, Vol. IX (1919), pp. 701-738.
738
AMERICAN MINIMUM-WAGE LAWS 739
general duty of so supervising and directing collective bargaining as
to preserve industrial peace, they were given authority to fix mini-
mum wages. The first independent wage-fixing agencies were, how-
ever, created two years later in the state of Victoria in Australia.
They were called Special Boards and were at first established experi-
mentally for certain notoriously sweated trades that employed both
men and women. These boards were composed of an equal number
of employers and employees, with a chairman from outside nominated
by both parties. They were given no explicit criterion to go upon
in framing their wage awards, but were apparently expected to argue
out their difficulties in true collective-bargaining style, under the su-
pervision of the disinterested outsider, their chairman, who was to
represent the public interest.
So successful was this system that it was extended to more and
more trades, was adopted by other Australian states, and finally,
in 1909, by England. The essence of the system is the free dis-
cussion of wage standards by the authorized representatives of both
sides, with the aid and criticism of one or more impartial outsiders ;
the fixing, by this responsible bipartisan group, of standards that
are thereupon compulsory upon all employers in the industry ; and
the reservation by the government of power to suspend or otherwise
mitigate rulings that appear positively unfair or inexpedient. No
definite cost-of-living criterion is set up. The level of the standards
finally fixed will rather depend upon the general temper of the com-
munity in which the law is operative and upon the respective bar-
gaining power of the two sides. Thus, in Australia, a young and
rather radical country, with labor relatively scarce and powerfully
organized, the tendency has been for the wages fixed to equal or even
exceed the minimum necessary for livelihood ; while in England, with
its cautious public and overstocked labor market, the tendency, espe-
cially in the first years of the law's administration, has been in
the opposite direction : the wages fixed, although well in advance of
previous rates for the trades concerned, have been as a rule avowedly
below the subsistence minimum.
Certain safeguards in the English law itself (Trade Board acts of
1909) have accentuated this difference. In the first place, the pro-
visions of the act could only be extended to other trades than the
four originally specified, "if they [that is, the Board of Trade, the
740 TRADE UNIONISM AND LABOR PROBLEMS
general supervisory body that establishes the separate trade board]
are satisfied that the rate of wages prevailing in . . . the trade
is exceptionally low, as compared with that in other employments,
and that the other circumstances of the trade are such as to render
the application of the Act . . . expedient."'' In other words, boards
could not be established unless conditions in the trade were worse
even than in neighboring trades, and then only if the financial state
of the business was sufficiently healthy. Yet in England, prior to
the war, wages in all the great woman-employing industries were
notoriously low, while the industries that were submerged even
beneath this level were extremely apt to be in a declining condition
financially. This clause in the law is therefore very interesting as
showing that business considerations were explicitly given priority
over humanitarian.
In the Victorian statute, on the other hand, these two sets of
considerations were, in the last resort, apparently to be considered
as parallel and noninterfering — an interesting comment upon the
general level of wages apparently contemplated by the Victorian
draftsmen. The Court of Industrial Appeals (the final reference
tribunal for the separate boards) is to consider, in its review of any
ruling, "whether the determination appealed against has had or may
have the effect of prejudicing the progress, maintenance of, or scope
of employment in the trade . . . affected ; and . . . [if so] . . .
the court shall make such alterations as in its opinion may be
necessary to remove or prevent such effect and at the same time to
secure a living wage to the employees."^
Another new safeguard introduced in the English law was the
prolongation of the period of initial delay before any ruling could
go into effect, together with elaborate provisions for indefinite
suspension by the Board of Trade afterwards in case the ruling
appeared to them "premature or otherwise undesirable."^
So much for the negative features of the English law. On the
positive side we find a centralization of supervisory power in one
1 British Trade Boards Act, igog, Section 1,(2) (italics mine) . This statute and
almost aU the succeeding ones quoted in this article may be found in " Oregon
Minimum Wage Brief," by Felix Frankfurter and Josephine Goldmark, pp. 1-76.
The individual notation of the American laws has therefore been omitted.
^Factories and Shops Act, 1912, Section 175 (italics mine).
^British Trade Boards Act, Sedition s, (2).
AMERICAN MINIMUM-WAGE LAWS 741
permanent government body, the Board of Trade, and the giving
of great flexibility to the possible scope of the wage rulings them-
selves : " Those rates may be fixed so as to apply universally to the
trade, or so as to apply to any process ... or to any special class
of workers . . . or to any special area."^
Both England and Australia make special provision, by individual
permit, for infirm workers to receive less than the established
minimum.
II. GROWTH OF AMERICAN LEGISLATION : THE MASSACHU-
SETTS AND OREGON PRINCIPLES CONTRASTED
Such was the status of minimum-wage legislation when it was
first seriously considered by this country in 191 1. In that year the
Massachusetts legislature passed a resolve requesting the governor
to appoint an investigating commission "to study the matter of
wages of women and minors, and to report on the advisability
of establishing . . . [wage] boards. . . ."^ This Commission on
Minimum-Wage Boards submitted an excellent report together with
the draft of a bill which, with certain important modifications, was
thereupon enacted into law.
In its original form this Massachusetts bill followed the British and
Australian system as closely as American constitutional limitations
permitted ; but these limitations were of the greatest importance.
1. The American law could apply only to women and minors,
since if it were extended to men it would most certainly be held by
the courts to run counter to the " freedom of contract " clause of
the Fourteenth Amendment.
2. The American law must beware of delegating legislative func-
tions to an administrative agency. It must therefore clearly define
(a) the conditions under which an industry should fall within the
scope of the wage commission at all; (b) the criteria upon which
wage awards were to be rendered ; (c) the exact relation of board
to commission. Since the commission was the permanent supervisory
body, the only safe course was, obviously, to centralize all ultimate
responsibility in its hands.
The essential features of the Massachusetts bill were accordingly
as follows : ( i ) It provided for a permanent appointive commission,
^British Trade Boards Act, Section 4, (i). 2 Resolves of igii, chap. 71.
^42 TRAlDE UNIONISM AND LABOR PROBLEMS
with power (a) " to inquire into the wages paid to the female em-
ployees in any occupation in the Commonwealth if the commission
has reason to believe that the wages paid to a substantial number
of such employees are inadequate to supply the necessary cost of
living and to maintain the worker in health";'^ (b) thereupon to
" establish a wage board consisting of not less than six representatives
of employers in the occupation in question, of an equal number of
representatives of the female employees, . . . and of one or more dis-
interested persons . . . to represent the public . . .";^and (c) upon
the receipt of a report from the board to "approve any or all of
the determinations recommended ... or [to] recommit the sub-
ject to the same or to a new wage board." ^ Once approved, the rates
were to be rendered obligatory, after due notice and public hearing,
by a formal order of the commission effective in sixty days. Vio-
lation of the order constituted a misdemeanor punishable by fine
and imprisonment. (2) The basis of wage determination by the
boards was made explicitly the double one of cost of living plus
financial condition of the business, with the business considerations
evidently taking the priority :
Each Wage Board shall take into consideration the needs of the
employees, the financial condition of the occupation and the prob-
able effect thereon of any increase in the minimum wage paid, and
shall endeavor to determine the minimum wage . . . suitable for a
female of ordinary ability. . . ."*
Apparently it was presupposed that the "suitable" wage finally
reached would commonly be below the actual cost of subsistence.
Such a view is borne out by the cautious words of the investigating
commission's report: "It is the opinion of this Commission . . .
that in all these industries the wage scale will stand a readjustment
of rates that will raise the lowest wages to something nearer the
living wage. . . ."^
^Section 3 (italics mine) .
2 Section 4 (italics mine).
3 Section 6.
* Section s (italics mine). It was hoped that the weight given the employer's
interests would avoid collision with the "due process" clause of the Fourteenth
Amendment.
^Report of Massachusetts Commission on Minimum- Wage Boards, p. 24
(italics mine).
AMERICAN MINIMUM-WAGE LAWS 743
Even so careful a statute was, however, unable to run the gant-
let of the Massachusetts legislature. Before its final passage the
bill was shorn of its most vital portion, the section on enforcement.
The "orders" of the commission were changed to mere "recom-
mendations," and the penalty of fine and imprisonment to mere
adverse publicity. The recalcitrant employer in Massachusetts is
now faced with nothing worse than the publication of his name
in certain newspapers ; and even this penalty he can avoid if
he can prove before a court that "compliance with the recom-
mendations of the Commission would render it impossible for him to
conduct his business at a reasonable profit." ^ Profits, in other words,
are avowedly made a "first charge" upon the business.
The weaknesses of this earliest of American minimum-wage laws
may accordingly be summed up as follows, under the three heads of
principle of wage determination, character of wage-fixing agency, and
method of enforcement.
1. Principle of wage determination. Women (normal, experi-
enced, adult women) shall receive wages just high enough to keep
them alive and physically well, provided their doing so does not
threaten to interfere either with the general financial prosperity of
the trade or with the " reasonable profits " of an individual employer.
2. The agency for the immediate carrying out of these principles
is a large mixed board of employers and employees, with in no
case more than one fifth of the total membership representing the
disinterested public.
3. The sole means of enforcement is in the indirect pressure of
public opinion. Boards and commission, therefore, know beforehand
that any ruling that threatens to prove burdensome to the individual
employer can safely be disobeyed, that anything approaching drastic
action will tend to defeat its own ends.
In view of all these limitations it is surprising to find how much
has been accomplished in Massachusetts. The mere focusing of atten-
tion upon the problem of wages and livelihood appears to have sufficed
materially to raise the wages in many submerged trades. The usual
process is for the board to thresh out what they agreed to be a
1 Section 6 (italics mine). As a matter of fact, the Commission has not found
it worth while to publish such a black list; instead it occasionally publishes,
white lists of such employers as do. comply I
744 TRADE UNIONISM AND LABOR PROBLEMS
minimum-subsistence budget and then to see how close they think
they can come to that without infringing upon the "financial condi-
tion of the business" or (what amounts to the same thing) without
incurring wholesale violation of their decree. Usually the wage finally
agreed upon lags about a dollar behind the original budget;^ while
this in turn has usually omitted or cut down below the subsistence
level a good many necessary items ; even so, the minimum is usually
a. distinct advance over previous rates. Thus in the brush industry,
the first to be investigated, the original budget came to $8.71 ; the
legal "suitable" rate v/as established at isJ^ cents an hour, which
allowed the average worker to earn about $7,^ but previous average
earnings had been below $6. The percentage of violations at the end
of the first year was gratifyingly low, and has been reported to be
decreasing since.^
1 Massachusetts Budgets and Wage Decrees to Jury i, 191 9*
Board
Budget Total
Date of
Budget
Decree
Date when
Effective
Brush
S8.71
Jan., 1914
15 J c. hr.
Aug. 15,1914
Candy
8.75
Summer, 1914
(no decree)
Laundry
8.77
Winter, 191 5
$8.00
Sept. 1,1915
Retail stores . . .
(no exact
budget)
8.50
Jan. 1, 1916
Women's clothing .
8.98
Spring, 1916
8.75
Feb. I, 1917
Men's clothing . .
10.00
Spring, 1917
9.00
Jan. 1, 1918
Men's furnishings .
10.45
Summer, 1917
9.00
Feb. 1,1918
Muslin underwear .
9.65
Winter, 1918
9.00
Aug. 1, 1918
Retail millinery . .
11.64
Spring, 1918
10.00
Aug. I, 1918
Office cleaners . .
11.54
Spring, 1918
30 c. hr. night work
26 c. hr. day work
Mar. 1, 1919
Wholesale millinery
12.50
Fall, 191 8
11.00
Jan. 1, 1919
Candy
12.50
June 5, 1919
12.50
Jan. 1, 1920
Canning
11.00
June 24, 1919
11.00
Sept. 1, 1919
•From Sixth Annual Report of Massachusetts Minimum-Wage Commission, Appendixes 3 and 4 ;
and Monthly Labor Review, April and August, 1919.
2 This rate was based on the supposition of a fifty-four-hour week, which
would here have given the worker $8.37. However, the industry was notorious
for its prevalence of short-time work.
3 It has averaged only about i per cent of the employees covered. (Report of
the Minimum-Wage Commission, .1915 and 1917, pp. 14-15 and 32.) However,
AMERICAN MINIMUM-WAGE LAWS 745
The example of Massachusetts so encouraged progressive groups
in various parts of the Union" that in the following year eight other
states passed minimum-wage laws. Of these by far the most im-
portant is Oregon's. It has served as a model for the bulk of our
subsequent legislation, and may fairly be contrasted with the original
Massachusetts statute as showing the growing definiteness and
articula-teness of the living-wage idea.
The Oregon law provides for a central administrative commis-
sion and subsidiary boards appointed by it after the Massachusetts
fashion, working through the orthodox machinery of public hearings
and private investigations and conferences ; but this machinery is
to be used for strictly living-wage ends. Section i reads :
It shall be unlawful to employ women in any occupation . . . for
wages which are inadequate to supply the necessary cost of living and
to maintain them in health ; and it shall be unlawful to employ
minors ... for unreasonably low wages.^
Boards and commissions alike are given no other criterion of wage
fixing than this simple and explicit one of the "necessary cost of
living." No mention is made anywhere of suitability, expediency,
or the financial condition of the industry ; instead, in every para-
graph the cost-of-living basis is repeated in identical words.
Once the recommendations of a board have been approved by the
commission, they are issued as obligatory orders, binding within
sixty days upon ever>' employer in the industry, regardless of his
difficulties in meeting them; disobedience is punishable by heavy
fine and imprisonment. Moreover, the personnel of the subsidiary
boards (here called conferences) is so arranged that impartial de-
cisions are more easily rendered: the whole board is smaller, the
representatives of the public have a larger share of the membership,
and everj-^ board has at least one member of the central commission
other determinations of the Commission have not been so well received. Thus
the great majority of laundry employers refused, illegally but successfully
(191S-1917), even to allow the Commission to examine their pay rolls to see
what their degree of compliance was (191S Report, p. iS; 1917 Report, p. 35) ;
while within the women's clothing industry the Commission reports (1917
Report, p. 36), "Complete compliance was found ... in only about half of
the custom dressmaking establishments."
^Italics mine.
746 TRADE UNIONISM AND LABOR PROBLEMS
sitting officially on it.^ In all these ways the double-standard,
collective-bargaining idea — the official balancing of opposing interests
— would seem to have given way before that of the living wage pure
and simple.
It may well be asked, AVhat could have caused so radical a change
in legal principle in one short year ? The answer is probably two-
fold. On the one hand, Oregon is a Western state, with more radical
views ill regard to industry, a relatively small number of women
employees, and a radical method of legislation (the minimum wage
was an initiative measure). On the other hand, Oregon had the ad-
vantage of being the second state to pass such a law : she already
had the solid precedent of Massachusetts to go upon; and, since
American constitutionalism required 'the wage-fixing basis to be quite
definite in any case, it became relatively easy for the Oregon advo-
cates to insist upon sloughing off the "double-faced" and apparently
mercenary elements of the older law.
Of the thirteen statutes that have followed Massachusetts and
Oregon nine may be said roughly to have copied the Oregon model,
one the Massachusetts model, while three have to be put into a
separate category as fiat-rate laws.^
III. FLAT-RATE LAWS
The flat-rate laws differ from both the earlier models in that they
operate not through commissions but through direct fiat of the
^"Such conference shall be composed of not more than three representatives
of the employers in said occupation, of an equal number of . . . employees
. . . and of not more than three disinterested persons representing the public
and of one or more commissioners" (Section 8).
2 Chronologically the laws run as follows:
1912 ^-Massachusetts.
1913 — California, Colorado (on the Massachusetts model, now obsolete),
Minnesota, Nebraska (repealed 1919), Oregon, Utah, Washington)
Wisconsin.
igiS — Arkansas, Kansas.
191 7— Arizona, Colorado (new law, on the Oregon model).
1918 — District of Columbia.
1919— North Dakota, Texas; also Porto Rico.
The gap in legislation that occurred during 191S-1917 was due to long-drawn
litigation m the Oregon case. The law was finally upheld by a divided opinion
of the Supreme Court— Justice Brandeis, as previous counsel for the defense
not voting. '
AMERICAN MINIMUM-WAGE LAWS 747
statute itself. The different rates for experienced adults, learners,
and minors are set once and for all in the body of the law and apply
uniformly throughout the state to all industries specified. The ad-
vantages of flat-rate legislation are that it (i) avoids the constitu-
tional difficulty of delegation of powers and (2) is extremely simple
and cheap to administer. Its overwhelming disadvantage is of course
its lack of flexibility.
The simplest and most inflexible of our flat-rate laws is that of
Arizona (1917). It covers all manufacturing, mercantile, hotel,
restaurant, and office occupations and sets for them one simple state-
wide minimum of $10 for all females, of whatever age or experience.
Somewhat more discriminating is the Utah statute of 1913. It
applies to all females in all lines of industry, but sets lower rates
for minors and learners than for experienced adults. The adult rate
is $7.50 per fifty-four-hour week. These rates were set in 1913 at
the passage of the original act and have never been changed since.
This is not surprising, since it would take a statutory amendment
to do so.
The Arkansas law (191 5) at first glance looks like a genuine
hybrid between the flat-rate and the commission principle. It sets
the same series of state-wide rates as Utah, culminating, in the same
$7.50 for experienced women, but it establishes at the same time
a minimum-wage commission of the usual type, under the chairman-
ship of the Commissioner of Labor, to revise the rate by localities
or trades whenever it may appear either too high or top low. On the
face of it this would seem a good compromise, combining the advan-
tages of a universal basic rate with those of periodic local adjustment.
In practice, however, the periodic adjustment has never taken place ;
the commission feature of the law has remained entirely unutilized.
In consequence, when, in August, 19 18, the National War Labor
Board was called in to consider the case of the laundry industry in
Little Rock,^ it found the operatives still receiving their 1915 mini-
mum of $7.50 per fifty-four-hour week, and promptly raised the scale
some 40 per cent, to $11 — an interesting example of the war-time
supersession of state by federal agencies.^
^National War Labor Board, Docket No. 233.
^A thorough-going flat-rate law has been established for Porto Rico in 1919.
It provides a weekly minimum of $6 for experienced women over sixteen, $4
for learners.
748 TRADE UNIONISM AND LABOR PROBLEMS
IV. COMMISSION LAW ON THE MASSACHUSETTS MODEL
Nebraska's is the only statute that at the beginning of 19 19 still
directly followed Massachusetts in its two characteristic features.
It had copied verbatim the earlier law's explicit consideration of the
"financial condition of the industry" and had adopted in mitigated
form its noncompulsory provisions.^ However, although passed in
19 13, this law had never gone into operation,^ and in the 19 19 session
of the legislature it was repealed. Now that the constitutionality of
the more radical type has been upheld in the Oregon case, there seems
little likelihood that any other state will recur to the older model.
V. COMMISSION LAWS ON THE OREGON MODEL
Of the nine laws that, following Oregon, have both enforceable
decrees and an unequivocal cost-of-living basis, three have been
rendered inoperative for longer or shorter periods of time by litiga-
tion connected with the Oregon case, while a fourth has as yet been
inactive (according to the Commission) because of war conditions.
^ It provided no other penalty save newspaper publicity. However, the pub-
licity was at least made mandatory, not optional with the Commission, and the
employer seeking exemption from it would have had to prove to the court that
compliance would endanger not merely his profits but " the prosperity of the
business."
The Nebraska law also copied Massachusetts in a less important objectionable
feature, namely, the requirement of a two-thirds majority for all decisions of
wage boards. In Massachusetts this has operated as a direct incentive to ob-
stinacy on the part of the employers, since employees and public, even though
combined unanimously, could never outvote them. (See, e.g., the account of
the disagreement of the Office Cleaner's Board, 1918, in the Monthly Labor
Review, April, 1919, p. 187.) In Nebraska the provision would, however, have
been mitigated in practice by the companion provision that each board must
have on its membership as representatives of the public the entire body of
commissioners (four).
2 In explanation of their failure to put any minimum wage into operation,
the Nebraska Commission stated that no complaints were made; "Since the
adoption of the law in 1913, no complaint has been filed with the Commission,
and therefore no meeting of the Commission has ever been held. . . . There
had been more or less agitation before this Commission was created in 1913, and
during the session of legislatures since, but there seem to have been no reports
of any kind made" (letter to the Secretary of the American Association for
Labor Legislation, July 22, 1918),
AMERICAN MINIMUM-WAGE LAWS 749
The new Colorado Commission (191 7) states that, owing to the
war, ..." there was no cause for complaint from the classes affected
by the Act, and consequently this Commission has had very little
... to do thereunder."^ As a matter of fact, however, this inactiv-
ity may well have been due, at least in part, to a more absorbing
interest in matters outside the minimum wage. The Commission here
is a general State Industrial Commission, with many duties.
The Wisconsin law (1913) also gave the wage-fixing power into
the hands of its general Industrial Commission. " During 1914-1917,"
writes their secretary, " this Commission believed that little could be
gained by establishing a minimum-wage scale which would im-
mediately be tied up by an injunction," while for some time there-
after they were hampered by lack of funds.^ However, now (since
August I, 19 19) they have established a state- wide minimum for
experienced women and minors over seventeen, in all occupations, of
22 cents per hour (or $12.10 per fifty-five-hour week).
The Kansas law gives the power of fixing wages into the hands
neither of a minimum-wage commission pure and simple nor of a
general industrial commission, but of a so-called Industrial Welfare
Commission created for the purpose of setting standard hours and
conditions of work as well as wages. In this respect it follows
Oregon^ and the other two coast states yet to be cited.*
Established as it was in 1915 after the beginning of the Oregon
litigation, the Kansas Commission has only been operative since
March, 1918. The Minnesota Commission, established two years
earlier, had the advantage of a year's enforcement of its rulings be-
fore the opening of the Oregon case, and revived those rulings later
in 19 18. Both commissions had evidently suffered from the cooling-
off process incident to so long a delay; they declared themselves
unable to adjust the recently legitimatized rates to present prices.
"Our first minimum wage went into effect on March 18 of this
year (1918)," writes a representative of the Kansas Commission.'
1 Second Report, Colorado Industrial Commission, pp. 127-128.
2 Letter to the writer, December 12, 1918.
^ It did not seem necessary while dealing with the Oregon law to point out
this additional administrative distinction, since it in no way affects the essential
nature of the wage award.
* The Washington Commission does not have power to fix hours, only wages
and working conditions. ^ Letter to the writer, October 31, 1918.
7 so TRADE UNIONISM AND LABOR PROBLEMS
"We consider that . , . [it] is very low. [Their rate for experi-
enced women in stores and laundries is only $8.50, although for
factories it has more recently been raised to $11.] However, it was
as much as the employers on our Board would concede," A repre-
sentative of the Minnesota Commission adds : ^
The Commission was reappointed on April ist of this year (1918)
[the Minnesota law had finally been declared constitutional three
weeks before], and it decided to enforce the wage orders already is-
sued . . . based on the cost of living in normal times in order that
the law might go into effect at once. [These rates provided a maxi-
mum of $9 for experienced workers in first-class cities.] If wage
rates were to be altered the Commission would have had to make an
exhaustive study into the cost of living covering the entire state
because our Attorney General has ruled that wage rates must be
state-wide in their effect when established. This would have meant
a delay of at least six months in the enforcement of the law.^
Two other commission laws, those of Texas and North Dakota,
have been enacted only this year (1919), so that no rulings have
as yet been issued under them. The Texas law provides for an
Industrial Welfare Commission, headed by the Chief of the Bureau of
Labor Statistics, while the North Dakota law, in unique fashion, gives
the power of fixing wages, hours, and working conditions into the
hands of its state Workmen's Compensation Bureau.
The four remaining commission statutes of a compulsory char-
acter have all been enforced from the beginning^ and have resulted
in the four highest sets of rates yet attempted. They belong to the
three Pacific coast states (19 13) and the District of Columbia
(19 18). The Pacific states have industrial-welfare commissions,
while the District of Columbia has a regular minimum-wage com-
mission. The language and substantive features of all four are, how-
ever, practically identical, the Oregon law having served as a model
for the rest.
1 Letter to the writer, November 9, igi8 (italics mine).
2The rates have since been scaled up (August, 1919). Experienced workers
in first-class cities now receive $11 per week of forty-eight hours or less.
3 Strictly speaking, the California law did not really get under way until
after the Oregon decision. During 1914-1915 the Commission confined itself to
a thorough investigation of wages and cost of living, and in 1916 issued but
one order, that on canneries. As soon as the Oregon decision was rendered,
however, in April, 1917, the Commission sprang into full acUvity,
AMERICAN MINIMUM-WAGE LAWS 751
All four sets of rulings are now based on a forty-eight-hour week.
For this, Oregon and Washington fix $13.20 as the minimum wage;
California, $13.50; and the District of Columbia, for the two trades
with which it has so far dealt — printing and publishing and mer-
cantile— no less than $15.50 and $16.50. All these rates have been
either newly set or revised within the past year. (Washington's
minimum dates only to November, 1919, while Oregon's became
effective October 14, 1918.) The three Pacific coast rates, like that
of Wisconsin, are most noteworthy in that, for the first time, they
apply uniformly to all trades covered by the law.
Two sets of factors aside from the drafting of the laws themselves
may have contributed to make these four recent sets of rates so high :
in the Pacific coast states a greater readiness to "give women a
chance," coupled with a lesser degree of overcrowding in the female-
labor market ; in the District of Columbia, the immediate proximity
of the United States Bureau of Labor Statistics, with its wealth of
scientific material plus personal explanation at the immediate service
of boards and commission. However, what is perhaps still more im-
portant, all these states have had close contact between commission
and local wage board. In California the executive officer of the com-
mission acted as chairman of the recent boards, while in the record-
breaking District of Columbia decision, all three members of the
commission have actually thus participated.
VI. DEFINITIONS OF THE LIVING WAGE
The variation in wording of the living-wage definitions in all the
various statutes we have seen passing in review does not, so far at
least, seem to have had any direct effect upon the character of the
decisions rendered. They run all the way from Kansas's " adequate
for maintenance" and "to supply the necessary cost of living"
to Minnesota's "sufficient to maintain the worker in health and
supply . . . [her] with the necessary comforts and conditions of
reasonable life" and Wisconsin's "sufficient . . . [for] . . . wel-
fare"— "welfare" being further defined as "reasonable comfort,
reasonable physical well-being, decency, and moral well-being."
Almost all the statutes, following the Oregon and Massachusetts
precedent, refer to health (" to maintain in good health "), and many
add a reference to moral protection or to general welfare or both.
752 TRADE UNIONISM AND LABOR PROBLEMS
VII. THE ROLE OF THE ADVISORY BOARDS
Another variation in the wording of the statutes, that does not
seem so far to have had any marked effect upon their operation, is
the variation in the role assigned the subsidiary wage boards. In
some states their appointment is mandatory, in others optional with
the central commission.^ In practice, however, with one exception
(Minnesota), all the commissions that are actually operative have
chosen to do their work through boards.^
This may seem rather surprising, since the presence of the boards
necessarily complicates and delays every decision. It means a larger,
more partisan, and less well-informed group of people discussing each
issue. However, it also means a group that is closer to the public
confidence. The board members are themselves direct representatives
of employers and employees, and in educating each other in methods
of straight thinking on the wage problem they are at the same time
helping to gain that general good will without which so new and ten-
tative a type of rulings could not finally succeed.
Moreover, as a purely practical question of time, the over-
burdened volunteer^ commissioner in a large industrial state could not
afford to go exhaustively into the technical problems of each trade
and then sit through a long series of hearings on each. The local-
board members* can divide up this responsibility and pool their in-
formation at the end.
Granted, then, that it has proved desirable to retain the services
of the advisory boards, the second question arises. What is (or
should be) the limitation of their power as over against that of the
commission? Once their advice is sought, may it be disregarded?
iThe new (1919) Texas law alone makes no provision for the calling of
such boards.
2 The states in which the appointment of boards is mandatory are Massa-
chusetts, Kansas, Nebraska, and Wisconsin.
3 In most states the members of the commission are wholly unpaid. In
Massachusetts and California alone do they receive a $10 per diem. Wisconsin,
Colorado, and Utah have general industrial commissions with salaried officers,
but their minimum-wage work is incidental.
* Board members are ordinarily paid a very small per diem, usually the
same rate as jurors, though in some states they receive nothing at all. Only
California pays as much as $S- Even these small amounts, however, form a
serious dram upon the all too scanty funds of the commissions.
AMERICAN MINIMUM-WAGE LAWS 753
Here interpretations differ. All the states allow the commission to
reject a report and resubmit the subject to the same or a new board ; '
but the real question is, May they themselves alter the recommenda-
tions without resubmittal?
Certain statutes, such as those of Oregon, Washington, and Kansas,
have been interpreted unequivocally to forbid this, and the com-
missions chafe under the strain. A representative from Kansas
writes : " We believe that the Boards are very, very helpful indeed,
but — that after the public hearing the Commission should be able to
make such modifications as it thinks necessary and issue the ruling
then as final." ^ On the other hand, certain other statutes, notably
that of California,^ plainly leave the alternative of commission
action open.
In California, consequently, the Commission has taken very useful
advantage of its privilege : thus, when the mercantile and laundry
boards of 19 17 failed to come to an agreement, the Commission
merely made note of the two conflicting sets of budgets and proceeded
to establish a final rate of its own.* Surely this is preferable to the
Kansas and Massachusetts system.
VIII. THE COMPOSITION OF THE ADVISORY BOARDS
In dealing with Massachusetts and Oregon we have already re-
ferred to the effect of variations in the size and personnel of advisory
bodies. Obviously, the larger the board, the greater will be its tend-
ency towards debate rather than scientific analysis. Similarly, the
larger the number of partisans as compared to the number of repre-
sentatives of the public, the less likely is the scientific view to get a
hearing. And, finally, the wider the separation of the board from the
sources of information accessible to the permanent commission, the
less likely is the scientific view even to be understood. The most
^And all but Minnesota allow them thus to resubmit any part of the subject.
^Letter to the writer, October 31, 1918.
3 The California statute reads: "... the recommendation of such wage
loard shall be made a matter of record for the use of the Commission" . . .;
and then : " The Commission shall have further power after a public hearing
had upon its own motion or upon petition to fix ... a minimum wage to be
paid to women and minors . . ." (Sections s and 6 ; italics mine) .
*See Third Biennial Report I. W. C. of California, pp. 24 ff. In both cases
this final rate approximated that of the employees.
754 TRADE UNIONISM AND LABOR PROBLEMS
efficient board is therefore unquestionably one in which the total
membership is small, the public being represented equally with the
other two sides, and on which, in addition, at least one member of
the central commission sits permanently.
This last requirement is fulfilled in Oregon, Washington, California,
and the District of Columbia, the four states as pointed out above
whose boards have so far promulgated the highest rates. In Massa-
chusetts the practice of the Commission has been to appoint as one
representative of the public the permanent paid secretary of the
Commission, who is known as " the executive officer of the board,"
and appears to be invested with a good deal more dignity than he has
in most states. This may help to account for the relatively good rul-
ings that the Massachusetts boards have issued. Certainly they ap-
pear to have been better informed than many of our statutorily more
fortunate bodies. In the nature of the case the secretary of a com-
mission is an excellent person to represent the scientific point of view
to the other members of an advisory board. He is the one salaried
expert who gives his full time to the work of the commission, and
should of necessity be more familiar than anyone else with all its
sources of information. His effectiveness is, of course, further en-
hanced when he holds full voting membership in both bodies. This has
been the fortunate practice of California, where the "woman's repre-
sentative" on the Commission, who acts also as its "executive officer,"
serves as chairman of each wage board. However, California has the
weakness of providing for no other representatives of the public.
IX. PRACTICAL DIFFICULTIES IN WAGE-SETTING : THE
PROBLEM OF AN ADEQUATE ORIGINAL WAGE
When it comes actually to fixing a "living wage," American boards
are confronted with a whole series of difficulties. In the first place,
whatever may be said in the language of the statute itself, every board
member knows that in practice the representatives of the employers
and all who sympathize with them are bound to take the condition '
of the industry itself into consideration. What else, indeed, are they
there foe? If the object of the law were merely to establish an
abstractly scientific standard of living for each employee, regardless
of its reaction upon conditions of employment and trade in general,
AMERICAN MINIMUM-WAGE LAWS 755
why work through representative boards at all? Why not merely
have a central executive commission or, better still, a single paid
expert whose duty it would be to adjust well-established family
standards (such as those issued by the United States Bureau of
Labor Statistics) to local conditions and the needs of the single
woman, revising these standards at appropriate intervals as the cost
of living went up or down? In practice everyone knows that
minimum-wage legislation is as yet in a tentative stage, that public
opinion is by no means "solid" behind it, and that the work of con-
ciliating and bringing into cooperative relations the members of all
parties represented on a board is still by no means the least of its
functions. The unequivocal language of our statutes, in other words,
is to be regarded rather as a guidepost for further progress than as
an index of present achievement, and the most that forward-looking
members of boards and commissions can do is to keep its prospect
fresh in the eyes of their colleagues. The great majority of repre-
sentatives of the public at present tend inevitably to side with the
employers so far as taking a vivid interest in the financial welfare
of the business goes. Thus questions of interstate rivalry are always
favorite topics of discussion — Will such and such a rate put the
manufacturers of state A at a disadvantage with state B ? Very
few are the representatives of the public who will not give at least
some weight to such considerations.
In the second place, the representatives of the employees are sel-
dom of a caliber at all comparable to that of the other two groups.
They are themselves, as a rule, working women unaccustomed to
mathematical reasoning and unable to express, in a careful and con-
vincing manner, even the facts they have clearly in mind. Knowing
.beforehand that something in the nature of a struggle is about to
take place, they are all too apt either to capitulate prematurely or
else to resort to mere sentimental appeals that lose them public con-
fidence. Above all, they are in very many cases unable to plead all
the facts they know with even the vigor and skill of which they are
capable, because they are afraid of the ill will of their employers.
All our laws, to be sure, insert severe penalties for any such dis-
crimination on the part of employers against workers who testify ;
but indirect discrimination is difficult to trace, and the habit of a
self-subordinating frame of mind is not easy to overcome.
756 TRADE UNIONISM AND LABOR PROBLEMS
Finally, all three groups (the employees of course especially) are
apt to be woefully untrained in the handling of budget material;
frequently it is difficult for them to grasp the very concept of an
average. When it comes to drawing up a supposedly accurate
schedule of necessary expenditures, therefore, the chances are a
hundred to one that the major items will be listed in their most fav-
orable (that is, least expensive) light, while many very important
minor items will be overlooked entirely. Employees are quite as
ready as employers to omit all such items from their calculations,
with the result that the budgets to which they agree are commonly
several very important dollars short.^
The following quotations from representatives of minimum-wage
commissions may help to illustrate some of the foregoing points : -
I. The bargaining character of boards ; weight given to financial
considerations :
The award of $13.20 was really a compromise between the employ-
ers and employees who served on the conference, the former having
recommended $12 and the latter $15 (Washington).^
Evidence is taken at each of the conferences on what the cost of
living really is, but, so far, no attempt has been made to verify or
sift or tabulate. ... In the . . . conference the employers fought
hard, and the employees were obstinate, so the result was really
obtained by bargaining. . . . They (the employers of another con-
ference) suggested that $11 was a fair minimum . . . and the em-
ployees threw down their defiance in the shape of a claim that $15
was necessary. . . . When a compromise was suggested in the
shape of $13.50, nobody offered the least objection . . . (British
Columbia) .^
The function of the commission in these debates is well summed
up by the Washington representative :
In the final session, with only members of the board present, the
wage question is always a struggle for a decent living by the employee
iThus questions of average medical attention, of average time lost through
illness or unavoidable industrial lay-off, of recreation, gifts, insurance, dues,
charity, reading matter, vacation, legal holidays, house moving, postage, toilet
supplies, railroad and car fare, extra food, etc., are tremendously skimped. The
common practice is to lump a great many of them together under the catch-all
"miscellaneous," with the resultant total often smaller than even one or two of
its component parts would be if taken alone.
2 Letter to the writer, November 19, 1918.
2 Letter to the writer, December, 1918.
AMERICAN MiNlMuM-WAGfi lAwS ?s7
and a struggle to keep down "overhead cost" by the employer,
and when it gets to the "bargaining" point (which it always has),
the Commission should insist on the text and spirit of the law that
the " cost of living" is the basis on which to decide the wage.
2. Weakness in bargaining power of the employees:
We consider that our minimum wage ($8.50) is very low. How-
ever, it was as much as the employers on our Board would concede
(Kansas).
Our experience (in 1913-1914) was not satisfactory. We found
the employers represented their class too well, and they tried to get
the minimum as low as possible, with no reference to the cost of
living. The rates finally adopted ranged from $8 to $9. The em-
ployees were lacking in initiative because of their fear of the em-
ployers. One might be able to get better representatives of employees
in those communities where women are better organized. The idea of
getting men employees to represent women employees might be
worth trying . . . (Minnesota).
X. THE TIME ELEMENT: DIFFICULTIES IN REVISING
RATES
One of the discouraging things about minimum-rate making is
that during a period of rapidly changing prices, such as we have had
ever since our first American wage laws went into effect, it takes a
very short time for a rate to become antiquated.^ When that hap-
pens it is difficult to get the commission to act — to start afresh on
the weary round of investigations and hearings and orders. The more
thorough the original investigation has been, the more will it neces-
sarily have cost in time and money and the less funds and energy
will there now be in the hands of the commission to repeat the process
or any part of it. On the other hand, if the original survey has been
cursory, or even if it has been painstaking but inexact, any revision
based in the main on those previous findings will incorporate the
errors of the former findings.
Of these two difficulties Minnesota furnishes a good example of
the first, Oregon of the second. In Minnesota the old 1913-1914
rates of $8-$9 have recently been reissued by the Commission, not
^Take as an extreme case the calendar year 191 7, during which the average
(country-wide) increase in living costs was some 25 per cent. By the end of the
year a $10 wage would have been worth only $8.
758 TRADE UNIONISM AND LABOR iPROBLEMS
because anyone supposes that a woman can today live on them, but
because the complete new state-wide survey which the Commission
considers necessary would take so long to finish that it seemed better
to iiave the old rates as a stop-gap meanwhile. In Oregon the 191 8
rates were based exclusively on the rise in living costs since the adop-
tion of the 1915-1916 rates; when, as a matter of fact, the 1915-
1916 rates, themselves a revision of the 1913-1914 ones, had been
markedly inadequate.^ By 19 19 the lag became so apparent that in
August a fresh state-wide minimum of $13.20 was enacted.
In distress over the 19 18 situation of continuous inadequacy and
upheaval, a representative of the Oregon Commission wrote:
There is too much of a tendency to fix the minimum ... at a bare
existence. ... If we could work out a scientific wage basis and give
the Industrial Welfare Commission power to advance that minimum
each time the cost of living made a perceptible advance, a lot of the
machinery which now must be used would be unnecessary.
To believers in the advantages of representative-wage-board ad-
ministration, the concluding suggestion would seem but a counsel of
despair. A more hopeful possibility, in the opinion of the writer,
would be to give the Commission limited power of revision in ac-
cordance with the terms of an order, say for a year after the order
went into effect, at the end of which time the usual conference ma-
chinery would have to be resorted to. More important than such a
step, however, would be the establishment for the benefit of all our
commissions of a thoroughly reliable clearing house to formulate the
basic standards themselves. An elaborate federal agency such as our
Bureau of Labor Statistics is of course eminently fitted for such a
task. It would be perfectly feasible for them to issue a series of
detailed and authoritative standards for self-supporting women, on
a strictly commodity basis, as they are at present engaged in doing
for families for the various large regional zones in the country that
iSo far back as 1913 the social-survey committee of the Oregon Consumers'
League, in a study which was at least more accurate than anything that has
succeeded it in the state, had set about $10 a week as a minimum living wage.
Yet in 1915-1916 the rates agreed to ranged to only from $8.56 to $9.25. Ap-
plying (quite fairly and scientifically) the 34 per cent increase which the figures
of the United States Bureau of Labor Statistics and other government agencies
showed at the beginning of 1918 to these low rates, the resultant $n.io-$ii.6r
still fell far short of a full living minimum.
AMERICAN MINIMUM-WAGE LAWS 759
have sharply differentiated costs and customs. These general stand-
ards the bureau would of course revise periodically in accordance
with the cost of living, so that all that would remain for the state
boards and commissions would be to make those purely local adjust-
ments for which they appear to be peculiarly fitted. Even if popular
pressure and the exigency of business conditions did drive a given
rate temporarily well below the established commodity minimum, it
would be with the immense advantage of leaving the basic facts in
the case undisguised and undisputed, and the natural burden of proof
weighing against the continuance of the objectionable practice.
Pending such a series of federal surveys, much could be done by
local commissions in comparing, adapting, and perfecting each other's
best standards, and in applying locally all the government figures
that do appear. The commission secretaries, if adequately paid and
endued with douHle membership on board and commission, as has
been previously suggested, could take the lead in this work of
standardization and education.
XI. THE GROWING SCOPE OF WAGE AWARDS
Within the past six months a most remarkable and hopeful develop-
ment has taken place in the direction of standardization of rates —
a standardization within states and between neighboring states as
well. Whereas formerly awards have always been made separately
for separate trades (and often for different sections of the state),
in the latter half of 19 19 Wisconsin, California, and Oregon have fol-
lowed the example (then unique) set by Washington a year ago, in
estabhshing uniform rates for all industries throughout the state.
In the case of the Pacific group, moreover, these rates are practically
identical for all three states — $13.20 and $13.50 per forty-eight-hour
week. For learners California and Oregon retain trade distinctions,^
but for experienced adults the rates all read alike. The significance
of this new departure can scarcely be overemphasized. It, more than
anything else we have hitherto had to record, marks the breakdown
of the old system of local business protection and the erection of
living standards that can be scientifically impartial.
^This is quite proper in view of the varying international advantages of
different trades. See sections XIV and XV below.
76o TRADE UNIONISM AND LABOR PROBLEMS
XII. THE LONG VIEW : ACTUAL EARNINGS VERSUS
HOURLY RATE
The final difficulty attending the decisions of board and commis-
sion is that of equating the nominal-wage rate to actual income.
Nearly everyone would agree, on the one hand, that it would be
absurd to pay a woman deliberately choosing part-time work a full
week's wage. On the other hand, nearly everyone would agree that
it would be equally unfair to pay a woman engaged for full-time
work, and required to be on the premises all through working hours,
for say only twenty-five hours of her time, if slack production, per-
haps in another part of the factory, kept her machine unexpectedly
idle at irregular intervals. But between these two extremes there are
many gradations which prove most elusive to handle.
The great majority of our commissions have made no attempt to
solve the difficulty. They have frankly adopted the hourly-rate
scale throughout the industries with which they have had to deal,
making no variation for chronically part time or seasonal industries.
That is, the so-called "weekly wage rate" they enforce is based on
the assumption that all workers work the full legal number of hours
each week ; it is only by so doing that they are to be enabled to
support themselves. If they work less, no matter by whose fault,
they will receive less than the week's minimum income that has been
agreed upon as necessary decently to support life. Thus Massa-
chusetts's order (November, 1918) for the wholesale-millinery in-
dustry contains the express proviso: "These rates ($11 for the
experienced adult) are for full-time work, by which is meant the full
number of hours per week (fifty-four)^ required by employers and
permitted by the laws of the Commonwealth." ^ This is for one of
the most seasonal industries in existence, where almost anyone would
1 Since then (1919) the legal hours of work in Massachusetts for women and
minors have been reduced to forty-eight.
2 U.S. Bureau of Labor Statistics, Monthly Labor Review, Vol. VIII, No. 2
(igig), p. 195. In the Arkansas flat-rate law the same principle is expressed
even more rigidly: "All female workers working less than nine hours per day
shall receive the same wages per hour as those working nine hours per day"
(italics mine) ; while the very recent state-wide Wisconsin order (June, 1919)
omits the mention of a weekly norm at all: "No employer shall employ any
experienced female at a wage rate of less than 22 cents per hour."
AMERICAN MINIMUM-WAGE LAWS 761
agree it is impossible to expect the employee to find full supplemen-
tary occupation in the short stretches between seasons.^
A slightly more hopeful position is shown in two orders of Oregon
and Washington. The Oregon order (April, 19 18) reads:
When business conditions render it impracticable for an employer
to furnish to any employee full-time employment (fifty-four hours),
the employer shall not be required to pay such employee any greater
sum than the hourly wage for the number of hours of actual employ-
ment, provided such employer shall so arrange consecutive hours of
continuous employment that each employee may have a fair oppor-
tunity [sic ! ] for securing such employment as will enable her to
earij a full week's wage.
Washington is a trifle more explicit as to what constitutes "em-
ployment," but fails to specify that the hours be consecutive. Among
the 1915 rulings we read:
(4) When an employee is required to hold herself at certain hours
at the call or service of an employer, such hours shall be included as
hours of employment.
(5) . . . any arbitrary condition imposed by the employer which
prevent her from earning ... [a living] wage is contrary to the in-
tent and spirit of the law. In exceptional cases, where business con-
ditions offer less than full-time employment (eight hours a day,
forty-eight a week), a regular schedule of hours shall be arranged
between employer and employee . . . [so] that she may not be
deprived of arranging for additional employment elsewhere.^
In striking contrast to these half-hearted attempts at amelioration
is the November, 1918, decree of the California Commisaon. Here
for the first time we have a recognition of the principle that it is the
employer who is responsible for keeping the employee's supply of
work steady. The decree reads :
^The same provision is to be found in the more recent decreases for canning
and candy-making, also seasonal (July, 1919). (See Massachusetts Minimum-
Wage Commission Bulletins 18 and 19.)
^I. W. C. Rulings, Form 17A (italics mine). The general War Emergency
Order of September, 1918, adds the following clauses: "Every . . . firm . . .
offering less than full-time employment to female employees in any . . . trade
. . . shall post in a conspicuous place in the establishment a proper schedule
of hours to be observed, for such period of time in advance as the Industrial
Welfare Commission shall in its discretion determine, not later than noon of
the preceding day" (I. W. C. Order No. 18, September 10, 1918; italics mine).
762 TRADE UNIONISM AND LABOR PROBLEMS
No person, firm, or corporation shall employ, or suffer, or permit
an experienced woman or minor to be employed in any manufacturing
industry at a rate of wages less than $io for a forty-eight-hour week
(21 cents per hour). // any employer does not provide the full
forty-eight hours of employment during any week, he must pay to all
experienced adult and minor workers not less than 25 cents per hour
for the time worked.^
It will be seen, of course, that this California scheme, a "penalty
differential" we niight call it, does not help the worker who is laid
off for a full week or more. In fact, if the differential were made
very pronounced it might well encourage an employer in a seasonal
industry (such as candy, millinery, or paper boxes) who was faced
with the alternative of using all of his force on part time or using
only a portion of them on full time, to choose the latter and lay off
as many as possible so as to be able to employ the remainder at
the full-time rate. Employments with a "peak load" on certain
days of the week would, however, be materially bettered. Thus the
laundry industry could not longer dock its employees for the short
time provided them on Mondays and Saturdays.
A more drastic step in the same direction has since been taken by
the Minnesota Commission. Their July, 1919, decree establishes a
flat weekly wage of $ 1 1 " per week of forty-eight hours or less." ^ The
short-week employer is thereby penalized by the full amount of his
underemployment.
A method that indirectly attacks the longer-time seasonal industries
has, however, recently been introduced by the Wisconsin Commission.
Their noteworthy first-wage order (June, 1919) provides that "in
seasonal industries operating only for a few months during the
year no learning period is recognized, and all female and minor
employees . . . shall be paid ... [the full experienced adult mini-
mum] ."^ Since in ordinary establishments lower rates may be paid
lU. S. Bureau of Labor Statistics, Monthly Labor Review, Vol. VIII, No. 2,
p. 192 (italics mine). Even more elaborate provisions are made in the Mer-
cantile Order of June^ 1919, whereby part-time workers receive 35 cents an
hour instead of 28.
2ItaUcs mine. Above forty-eight hours the rate is no higher, namely, still 23
cents an hour.
^Industrial Commission of Wisconsin, Order of June 27, 1919, sect 4 It
should, however, be noted that the order explicitly omits all provision for the
chronically short-hour industry. In section i of the "Findings of Fact"
AMERICAN MINIMUM-WAGE LAWS 763
to as many as 25 per cent of the employees, this means a very real
penalty for the seasonal trade.^
It would, however, doubtless be advisable to assess industries that
are notoriously seasonal even more directly by raising their general
minimum for experienced workers as well. This, on a weekly basis,
was the system adopted by Australian boards for the highly irregular
occupation of dock laborer. "In setting the minimum hourly rate
. . ., the necessary cost of a week's living was divided by the average
number of hours of work obtained weekly."^
This system has also been adopted by Massachusetts in a recent
ruling on office-cleaners (January, 1919)." This ruling is in its way
quite as remarkable as the ones quoted from California and Wiscon-
sin. Here the Commission had found by previous investigation that
the average number of hours worked per week at the occupation was
only thirty-six, and that four fifths of the women worked at night.
The new ruling provides a 30-cent hourly rate for night work and
a 26-cent rate for day work. On the basis of the full legal fifty-
four-hour week, even the day rate would yield $14, whereas the
budget agreed to by the board amounted to only $11.54. It was
therefore the typical thirty-six-hour worker whose case was really
being provided for. True to Massachusetts tradition, she would re-
ceive somewhat less than the budget allowed, namely, at the 30-cent
rate, S10.80 a week, and at the 26-cent rate, $9.26. These are not
very munificent sums, but the recognition they show of the short-
time problem is extremely important.
However, the idea suggested by the California decree, of making
the rate directly enforceable upon the individual employer who fails
to provide full work, and upon him alone, seems too good to lose sight
we read : " Many items in the cost of living of female and minor employees
vary directly with the number of hours they are required to work. Those who
have short hours of labor . . . having time to do much work for themselves
. . ." etc. Section i of the order proper accordingly reads baldly : " No em-
ployer shall employ any experienced female or . . . minor ... at a wage rate
of less than 22 cents per hour."
iQn the Wisconsin scale it would amount to about 3 to 4 per cent of the
wages bill.
^Nev) Statesman, June 6, 1914, p. 263, quoted in Commons and Andrews,
Principles of Labor Legislation, p. 182.
3 See U. S. Bureau of Labor j Statistics, Monthly Labor Review, Vol. VIII,
No. 4 (1919), pp. 186-187.
764 TRADE UNIONISM AND LABOR PROBLEMS
of. Perhaps a combination of both methods would be possible;
namely, a slight penalty for the habitually seasonal or short-time
industry as a whole in the shape of a higher hourly rate, and an
additional differential for the employer whose work was unusually
irregular.^
A point which it is important to stress, while dealing with the
matter of hourly rates, is that it is closely bound up with the ques-
tion of the legal hours of employment in each state. The same
weekly mininium may mean very different things to both employer
and employee if the number of hours for which it is being paid is
different. Thus Oregon in April of 1918 changed her minimum for
manufactures from $8.64 to $11.61. Meanwhile her neighbors,
Washington and California, were paying only $10.^ At first the
employer members of her board protested at this disproportionate
advance, but it was successfully pointed out to them that, since both
Washington and California were limited to a forty-eight-hour week,
while Oregon worked fifty-four, the respective wage rates for the
three states would be rendered practically equal, thus,:
Washington and California . . JfSio.oo a week -f- 48 Iiours = 21 cents per hour'
Oregon jSii.61 a week -=- 54 hours = 21J cents per hour
^This could be assessed in some such way as the one originally outlined by
the chairman of the first Massachusetts brush board (quoted in Annual Report
of New York Factory Investigating Commission, Vol. VI (191S), Appendix IV,
p. 633): "Each weekly pay day the minimum weekly rate set by this board
shall be multiplied by ten, and if the total earnings during that ten-week period
immediately preceding each weekly pay day do not equal that amount, the
difference shall be paid her each week." A simpler method, however, in the
opinion of the writer would be to assess each employer at an hourly rate that
roughly corresponds to the average per-capita short time that he had pro-
vided during a specified period in the recent past. Thus an employer who
had averaged 20 per cent fluctuation above that allowed for in the general trade
estimate would have to pay a 20 per cent differential on his minimum hourly
rate. (Needless to say, "short time" in the above sense does not include time
lost by the worker's own fault, i.e., voluntary absenteeism.)
2 The California decrees at this time did not cover manufacture, but $10 was
the rate for stores, etc.
3 Incidentally the Oregon members were made to realize that hitherto the
advantage had lain very heavily on the other side and that, nevertheless, their
neighbors had not been ruined. Up to this time, when the Washington and
California rates were already $10, or 21 cents per hour, the Oregon rates for
manufacture had ranged from $8.25 to $8.64, or isK-16 cents per hour. (The
higher rate was for the city of Portland.)
AMERICAN MINIMUM-WAGE LAWS 765
The close connection between hours of work and wages per hour
is doubtless one very important reason why so many of our states
have assigned hours as well as wages to the jurisdiction of their
minimum- wage ("industrial welfare") commissions. Where no di-
rect connection between the hour-fixing and the wage-fixing machinery
of a state exists, it is always possible to reduce the hourly wage by
increasing the number of hours for a given industry. Thus a repre-
sentative of the Washington Commission writes : " During one session
of the Legislature the . . . Association . . . attempted to secure an
amendment to the woman's eight-hour law providing for an emergency
clause allowing overtime. Had this passed, it would have indirectly
reduced wages, as all wages are based on an eight-hour day and six-
day week." ^ And again, " The question of seasonal industries, such
as fish and fruit canning, do not come under the Factory Orders and
the wage^ applies to them." The converse of this connection is seen
where the legal hours of work are suddenly reduced. The wage per
hour is automatically raised. Thus Massachusetts's adoption (1919)
of a forty-eight-hour week in place of a fifty-four gives her women
nearly a 13 per cent hourly increase.
XIII. SPECIAL CLASS OF WORKERS : THE DEFECTIVE
Besides the difficulties attendant upon the setting of the regular
rate for normal adult women, our minimum-wage commissions have
to face the problems of three special classes of workers generally
recognized as substandard: the young, the inexperienced, and the
defective. Of these, the defective have thus far proved much the
easiest to deal with.
In all our states save Massachusetts, Wisconsin, and Kansas the
class is narrowed to include only adult women who are physically
defective.^ The method of handling these cases is always by individ-
ual license, issuable by the commission direct. The wage boards
naturally have nothing to do with them. Each license sets a special
1 Letter to the writer, October 26, 1918.
2 I.e. the rate per hour. This gives a higher weelcly wage to these long-
hour industries.
3 In Wisconsin, however, it applies to "any female or minor unable to earn
the living wage," and in Massachusetts and Kansas to "any employee . . .of
less than ordinary ability. . . ."
766 TRADE UNIONISM AND LABOR PROBLEMS
substandard rate for the worker concerned, which may be temporary
or permanent according to the nature of the defect and the wording
of the law. Some laws limit the proportion of defectives that may be
employed in any one establishment to one in ten.
So far the total number of licenses issued by the active minimum-
wage states has been surprisingly small. As one secretary writes,
"Employers evidently do not want to ask for defectives' permits
unless there is no question about the employee's being unable to make
a living because of . . . her defect." Washington reports only fifty
in five years of commission activity. The California Commission
states in respect to the laundry industry, where infirm workers are
more easily accommodated than elsewhere: "No license has been
granted to any woman except upon the signed statement of a licensed
physician that the applicant was not able to work to normal capac-
ity at ordinary tasks, either because of age or physical disability.
Even then no license is granted for less than $8. . . . In No-
vember, 1918, less than 3 per cent of the total employees . . .
[held] such permits."^
None of these states report any difiiculty because of applications
from the mentally defective. In many cases, of course, the mentally
defective would also be physically handicapped and thus receive
their classification without question. Of the six licenses thus far
issued by the Minnesota Commission three were for women thus
doubly handicapped. Our informant states that no case of purely
mental defect has as yet arisen. The Washington Commission
reports similarly, "We have had no application from a mentally
subnormal person."
In view of the large number of mental defectives known to be at
large in our population, this state of affairs is certainly surprising.
Perhaps the majority of them find their way into simple piecework
operations where their reduced output can affect no one but them-
selves.2 Others doubtless drift about from job to job, never making
themselves valuable enough to an employer to cause him even to try
1 Third Biennial Report, I. W. C. of CaUfomia, p. 70.
2 However, in a state like CaUfomia they would probably be discovered even
there if large numbers congregated in any one branch of piecework, for
California has the provision in her ruling on manufactures that 66* per cent
of all pieceworkers employed by any one establishment must earn over the
weekly rate (I.W.C. Order No. 11, amended 1919, sect 8 (d))
American minimum-wAge laws 767
for a license for them. But a large remainder appear to be still un-
accounted for. Can it be that much of our industry is so simplified
and routinized that even a moron is good enough to support herself
at it ? Nay, possibly that she may in some respects be preferable to
her normal and therefore more restless sister ?
In the future without doubt the problem of the defective will grow
more acute, as minimum-wage legislation is extended to our more
thickly settled industrial states and as the minimums in our existing
rulings are raised to something nearer a full living wage. A clear
understanding of the ground of licensing would then be imperative.
The Massachusetts-Kansas-Wisconsin system of "wide open" licenses
would doubtless offer increasing dangers, while a definition that
strictly excluded all but the physically incapacitated would doubtless
err equally on the other side.
As the number of licenses grows, opportunities for constructive
social work on the part of the commissions should grow also. They
can become the logical centralizing agency, the clearing house, for
putting adult women defectives in touch with other appropriate
agencies. The system of renewable licenses will enable them to keep
track of the progress of each case, while threat of forfeiture gives
them unusual persuasive power.
XIV. MINORS AND APPRENTICES
The problem of the untrained and the immature worker is far
more puzzling. How long does it take a woman to learn a trade?
(What trade?) How much longer does it take her if she is not a
woman but a young girl? (In which trades does age count for
most?) Are there any trades in which an experienced girl under
eighteen is as useful as if she were grown ? What is a trade anyway ?
How far shall one go in subdividing our complicated industry to tell
when a woman who is changing her position must begin at an appren-
tice wage over again ? These are some of the questions that have
gradually been brought home to our commissions in the course of
their operations.
The method of administering the problem is unfortunately some-
what complicated. In most of our laws it is provided that both these
classes of workers shall receive special rates, but that, while the rate
768 TRADE UNIONISM AND LABOR PROBLEMS
for minors shall be fixed by the commission direct, that for adult
learners shall be reached by the usual board machinery.^ It may
well be that some of the planlessness of which we shall hereafter have
cause to complain is due to this divided responsibility. On the face
of it the two problems are so closely related that it seems only reason-
able to have the same agency responsible for both. That agency, in
view of the extreme complexity of the subject, would naturally be
the central commission. However, the technical trade advice of the
lower boards could be made extremely valuable to the commission,
provided it were not made finally binding.
The Oregon apprenticeship rulings show very interestingly how
one commission, or, if you will, one group of boards, has gradually
been awakening to the complexity of its task. In the 1913 ap-
prenticeship conferences Oregon merely issued a flat-rate minimum
of $6 per fifty-four-hour week for all industries, " and the maximum
length of time such workers shall be considered inexperienced in any
one industry shall . . . be . . . one year."^ Here we have no at-
tempt to define what is to be considered "one industry" and no
distinction between apprentices who are brand-new and those who
are almost completely experienced. Moreover, the learning period
itself is extremely long. If such length had any justification at all,
one would suppose it could only be on the ground of acquainting the
learner with a good many branches of a rather difficult trade.
The commissioners themselves, however, apparently had no clear
idea on the subject, for they seem to have done nothing to prevent
employers from taking advantage of the loose wording of the ruling.
By 1916 such grave abuses had sprung up that the new conference
then in session was instructed to consider a refinement of terms.
" Some employers dismissed girls as soon as the first year had ex-
pired or shifted them to slightly new work in different departments,
1 The laws of two states, California and Washington, make no express dis-
tinction between the wages to be paid the skilled and the unskilled; and
California makes no distinction between minors and adults. Both these states,
however, empower the commission to issue individual apprenticeship Ucenses!
In practice this provision appears to have made for greater flexibility of rul-
ings. (Note, however, that in her general War Emergency Order of November,
1918, Washington chose to ignore all differences of skill — the flat rate of $13.20
being supposed to apply to all women and the I9 to all minors.)
2 Quoted in "The Oregon Minimum Wage Law" (Reed College A.B. thesis)
by Samuel B. Weinstein, p. 21 (italics mine).
AMERICAN MINIMUM-WAGE LAWS 769
thus starting them on a second year of apprenticeship at $i a day."^
It apparently never occurred to the conference to go so far as to re-
quire the new employer to pay the girl what she had last been receiv-
ing or to force the old employer to increase the girl's wage at the
expiration of a year of any sort of service with him. Instead, they
tried the method of inducements : they adopted a rising scale, begin-
ning at $6 as before, but increasing $1 every four months, so that by
the end of the year the apprentice would be receiving very nearly the
full adult minimum and the temptation to dismiss her would be very
much reduced. This device of the graduated scale is now in use by
practically all our commission states.^ It operates as an incentive to the
employee to stick to her job as well as to the employer to retain her.
By 19 1 8 Oregon had decided to attempt a refinement of the
graduated scale. When it came to raising the general level of wage
rulings in accordance with war prices, the mercantile conference
decided to abandon the policy of fixed three-month periods and to
substitute irregular periods, the first very much shorter than the
others, to encourage the new hand to overcome the inertia of the
first few weeks ; moreover, they decided to shorten the total ap-
prenticeship term for their industry from a year to eight months.^
All the Oregon 19 18 conferences finally realized the necessity of
meeting squarely the abuse of shifting girls about from one depart-
ment to another. They accordingly had the Commission issue the
following ruling :
After any woman shall have completed any prescribed period of
service as an apprentice, she shall not thereafter, while working for
the same employer, be paid a wage less than that prescribed for the
next succeeding period, unless a permit therefor shall be issued by
the Industrial V/elfare Commission.*
1 Quoted in "The Oregon Minimum Wage Law" (Reed College A.B. thesis)
by Samuel B. Weinstein, p. 31- ^ , , ^,
2 California in her latest order (No. S, amended June, 1919) adds the express
warning "Learners' permits will be withheld by the Commission where . ._.
firms . . . make a practice of dismissing learners when they reach their
promotional periods."
3 This system has been perpetuated under the new 1919 rulmgs. The mer-
cantile scale now runs: first month, $g per forty-eight-hour week; next three
months, Sioso; last four months, $12; full adult wage, $13.20. A somewhat
similar system had previously been in force in Washington for the laundry and
telephone industries. (Oregon LW. C. Order No. 37, August 12, 1918, sect. 3.)
*I W C Order No. 36, April 12, 1918, sect. 5 (itaUcs mme).
770 TRADE UNIONISM AND LABOR PROBLEMS
So far Oregon has not issued any ruling to prohibit a new em-
ployer from engaging a partly experienced girl at a beginner's wage.
Discussion at present centers about the question of how greatly
variations in individual iirm methods justify at least a short initial
term of fresh apprenticeship.^ Wisconsin and Arkansas alone have
faced the issue unequivocally. The Arkansas flat-rate law (iQiS)
states, "All time served as inexperienced workers or apprentices
shall be cumulative"; while the Wisconsin Commission's first-wage
order (June, 1919) reads, "Employees shall be deemed experienced
after six months of employment in the trade or industry, whether for
the same employer or different employers."^
In general it may safely be said that the problems of apprentice-
ship have not received the thorough and dispassionate study which
they demand; that, in fact, they have been slighted as compared
with the problems of the experienced worker. Very probably the
chief fault lies in a lack of vital interest on the part of the employees'
representatives, — their own apprenticeship period lying so very far
in the background of their memory, — combined with a lack of in-
timate knowledge of trade processes on the part of the representatives
of the public, and a natural desire on the part of the employers to
"get a bit of their own back" where they find least opposition to it.
Unquestionably the great majority of our apprenticeship periods have
been too long, the wages too low, the instruction indifferent, and the
opportunity for abuses in the way of repetition of half -completed
periods too little guarded against.'
It would take a very thorough revamping of our present industrial
methods to give inexperienced women the most rapid and thorough
training of which they are capable ; but surely the process could be
greatly speeded up by the mere mechanical shortening of the learning
^Some commissions take the mild precaution of requiring the old employer
at any time to furnish the apprentice upon request with a certificate showing
the length of her service with him. Arkansas contains this provision in her
statute.
21. W. C. Order of June 27, 1919, sect. 4.
3 One abuse very commonly guarded against is the employment of a dis-
proportionate number of apprentices in any one establishment. Thus the new
California rulings for . . . stores and factories provide that: "The total num-
ber of learners . . . (adult and minor combined) shall not exceed 33/^ per
cent of the total number of [workers] employed" (sect. 3). See I.W. C.
Orders s and 11, amended 1919, sect, i, (e).
AMERICAN MINIMUM-WAGE LAWS 771
period, forcing the employer to concentrate whatever training he
did propose to give into a shorter time, and protecting him, with
low initial wages but a rapidly rising scale, on the one hand from
the temptation of discharging the partially trained, and on the other
from the inclination of the partially trained themselves to wander
off and seek a fresh trade.
The extent to which the length of the apprenticeship period may
be a matter of local custom^ — ^or rather of local inertia — is shown
by a comparison of three recent laundry awards of Massachusetts
and Arkansas. In Massachusetts all apprenticeship periods are ex-
tremely long (probably yet another reflection upon her system of
nonenforceable awards), ranging from one to a full two years.^ Her
laundry award whereby workers are "held experienced after one year,
if absences have not been of unreasonable duration," is therefore by
no means exceptional.^ In Arkansas, by the 1915 flat-rate statute,
the apprenticeship period for all trades (laundries therefore included)
was set at six months, just half that of Massachusetts. Yet when in
the summer of 1918 the National War Labor Board came into that
state to settle the laundry difficulties in Little Rock, it not only raised
the whole wage scale tremendously but promptly reduced the six-
month period to thirty days? Here we have a variation in three
typical rulings of 1200 per cent.* Which of the three was right ?^
^See table, "Minimum Wage Regulations for Women, January i, 1917," in
Oregon Minimum Wage Brief, p. 76.
2 Thus millinery (December, 1918) requires two years, candy-making (July,
1919) a year and a half, and even canning (July, 1919) a year ! Contrast with
this last the recent Wisconsin decree: "In seasonal industries operating only
for a few months during the year no learning period is recognized, and all
female and minor employees . . . shall be paid . . . [the full experienced-adult
wage]" (Minimum Wage Order No. i, June 27, 1919, sect. 4).
3 National War Labor Board, Docket No. 233, Joint Report of Section In
re Employees vs. Laundry Owners, Little Rock, Arkansas.
*An almost equally striking variation is found in the laundry rulings (prior
to September, 1918) of the three Pacific coast states, where conditions of work
might be considered more closely equivalent and where no outside agency has
interfered. In Oregon the period was one year ; in California, fifteen months ;
and in Washington, two months ! The California period has now been reduced
to sk months, while Washington's 191S rulings recognize no learning period
at all.
^The arguments for short-time trainmg are certainly borne out by the ex-
perience of the U.S. Shipping Board, which during 1918 carried on appren-
ticeship courses for all the various difficult shipyard trades. The learners, who
772 TRADE UNIONISM AND LABOR PROBLEMS
XV. SOME SPECIAL PROBLEMS OF MINORS
For the workers under eighteen the difficulty of securing adequate
training in the shortest possible time is complicated by the desirabil-
ity of keeping the younger of them out of industry altogether. A
high initial wage, it may cogently be argued, directly encourages the
small boy or girl of fourteen to leave school and go to work. On the
other hand, a very low initial wage encourages the employer to seek
out all the immature help he can. Which is stronger, the induce-
ment to the child and its parents or the inducement to the employer ?
Most of our commissions have taken a middle ground, apparently
assuming that while it is their primary duty to protect the child from
crass wage exploitation, they need not scale up his wages too meticu-
lously in accordance with his probable productivity. Thus Oregon's
191 9 orders assigned all minors between fourteen and fifteen a flat
rate of $6, those between fifteen and sixteen, $7.20.^^ In Washington,
for two years previously, the flat rate for all under sixteen was $6.^
In their war-time emergency conference the Washington Commission,
however, appears to have swung over to the full-productivity idea :
its minimum for all minors is now $9, with a dollar increase every
six months of employment.' In British Columbia the Commission has
taken the commendable stand of trying to keep the girl under sixteen
out of industry altogether by "preventing, except under special
license, the employment of such girls " and by " collaborating with the
educational authorities to raise the age for leaving school [and] . . .
to provide more satisfactory methods for industrial . . . education."*
For minors over sixteen there seems no good reason to prolong
the low-wage period beyond what is absolutely necessary by reason
"were drawn principally from unskilled shipyard work and from manufactur-
ing," were after their training able in the main to hold their own with ex-
perienced journeymen. Yet "statistics from twenty-one yards indicate that
the average training period for all men was nineteen days" (See P. H. Doug-
las and F. E. Wolfe, "Labor Administration in the Shipbuilding Industry during
the War," Journal of Political Economy, May, 1919, pp. 378-379.)
^Oregon I. W. C. Order No. 46, August 12, 1919.
"Washington I. W. C. Order, September 14, 1917.
^I.e. until the adult minimum of $13.20 is reached.
* Letter to the writer by a close associate of the Commission, January 17,
1919.
AMERICAN MINIMUM-WAGE LAWS 773
of lack of skill. All our commissions now arrange a rising apprentice
scale for these workers, but in most states the rise is unduly slow.
Thus in Oregon, while the initial wage for minors over sixteen is
nearly as high as that for women learners (viz. $8.50 instead of $9),
the subsequent advance toward the full minimum takes three times
as long. "For the purpose of determining a rising scale for minor
apprentices the working time of female minors between sixteen and
eighteen years shall be divided into periods of three months each.
Each period . . . shall be considered the equivalent of one month
in the corresponding period of the apprenticeship of the adult
worker."^ There are no exceptions to this rule. Consequently no
girl under eighteen, however proficient she may be and however long
her trade experience (it may be almost four years), can ever com--
mand the adult minimum. Minors over sixteen who are not appren-
tices also begin at $8.50 and are advanced 50 cents every six months.
In Massachusetts the rise is even slower. There in the retail-store
industry no girl, however experienced, can command more than an
apprentice wage until she is over nineteen ; while in women's clothing
factories she must be nineteen and a half.
In California, on the other hand, mere immaturity as such is not
allowed to affect the status of a worker once she is partially ex-
perienced. Here in the laundry and hotel and restaurant industries
the girl of from fourteen to eighteen starts on an exact par with her
adult sister ; in stores, factories, and offices she starts at a dollar
lower wage, but after a given initial period continues on through
the regular stages of adult apprenticeship at adult wages ; only in
"unskilled and unclassified" occupations does she remain perma-
nently below adult par.^
In Wisconsin the exceptionally proficient minor is safeguarded by
the provision : " Permit children producing the same output as em-
ployees in a higher wage classification shall be paid not less than the
minimum wage rate for such class." ^
II. W. C. Order No. 46, sect. 2.
2 For three weeks she receives $8 instead of the adult's $10, and thereafter
$10 instead of the adult's $13.50.
3In Order of June 27, 1919, sect. 3.
774 TRADE UNIONISM AND LABOR PROBLEMS
CONCLUSION
In summing up this review of American minimum-wage admin-
istration, it maybe well to group our recommendations for the future
under three definite heads : first, the need for a real living standard ;
second, the need for a more flexible standard ; third, the need for
centralization of administrative responsibility.
I. A Real Living Standard
1. First and foremost among our needs is undoubtedly that of a
clear, unequivocal, basic standard of living for the working woman,
a standard that shall take account of the whole range of her neces-
sities, not only day. by day but year by year.^ For this we should
have a standard btidget, ioTmula-ted preferably by our federal Bureau
of Labor Statistics, revised by them periodically in accordance with
changes in the cost of living, and adjustable by local boards and
commissions to local conditions.
2. To reduce -this budget to terms of weekly wage rate we must
have (a) a clear-cut policy on the part of boards and commissions
that the "living wage " shall mean a " living income " the year round ;
(b) more accurate information by these bodies as to local irregu-
larities of employment ; (c) a simple method of advancing hourly
rates by "irregularity differentials" whenever trades or individual
establishments -fail to provide full-time work.
3. -A necessary corollary to such a full living standard would be
the extension -of our special provisions for substandard workers,
(a) For defectivesy who would now of course include the mentally
incapable, the double system of individual licensing plus limitation
of numbers in any- one establishment might well be revised to include
a third element, namely, the selection of a series of especially "ap-
proved" occupations in which such workers could be allowed to
congregate without limit; each plant in the "approved" list being
subject to special supervision by the commission — all defective
workers, meanwhile, whether working in an "approved" establish-
ment or at large, to be inspected and relicensed periodically, (b) For
1 For a detailed discussion of the components of such a standard see D. W.
Douglas, "The Standard of Living for Working Women: a Criticism of Current
Theories," Quarterly Journal of Economics, February^ 1920.
AMERICAN MINIMUM-WAGE LAWS 775
lexperienced workers and minors we need a more scientific series
f state-wide "rock-bottom" minimums, graded according to age;
nd above these a series of specially adjusted apprentice mini-
lums that should be as varied as the trades they represent. That is,
should be left to the discretion of the commission and boards
'hether for a given trade there should be any distinction at all be-
veen the comparatively new and the old hand or between the youth-
il and the adult ; and if there should, just what ought to be their
dative rates of advance. The number of apprentices allowed in any
ne establishment should doubtless continue to be limited.
II. A Flexible Standard
Nekt only to the need for a standard that shall be adequate at the
utset is the need for a greater flexibility in its application. I have
Iready pointed out the need for (i) more rapid revision of estab-
shed rates in times of sudden price changes and have suggested
hat for specified periods of a year or so the commissions be given
d interim power to revise existing rates. They could readily
o this in accordance with the cost-of-living index numbers which
lie Bureau of Labor Statistics could furnish them. Two other
evices for increasing flexibility are, however, no less important,
'hese are (2) the forestalling of bad wage conditions that are as yet
nly apprehended, by empowering the commission to issue rulings
or trades that may at the time still be on a living basis ; and (3) the
asing off of radical advances for the employer by permitting
he commission under exceptional circumstances to distribute the
cheduled advance in wages over a specified period. Reform number
hree is a refinement over the method now in force in Washington
where the application of the whole rate as such may be postponed),
nd is to be found in its present form "in the excellent new British
^"rades Board Act of 1918.^
^It was also used, although without express legal provision, by the original
lassachusetts Brush Makers' Wage Board in 1914: — "The rate to go into effect
t once shall be isVi cents an hour. At the end of a year's time the rate shall
utomatically become 18 cents. . . ." (Second Annual Report of the Minimum
l^age Commission of Massachusetts, p. 9). Ordinarily Massachusetts follows
be Washington method. Thus the candy decree of last July does not go into
ffect until January,
776 'Trade unionism and labor problems
Number two occurs in the revised British statute alone.^ Both
these innovations are of great significance ; the anticipation of low
wages is especially valuable in a time of sudden oversupply of labor
such as has occurred in many industries since the close of the war,
while the gradual application of certain rates is sure to become a
practical necessity as the living-wage idea becomes more firmly estab-
lished and radical advances grow more common. Where some com-
promise with purely financial considerations appears inevitable, this
f(3rm is infinitely preferable to the current one (of setting up a final
rate that is substandard), since this proposed device is self -remedying
and deceives no one.
III. Centralization of Administrative Responsibility
Finally we need a greater concentration of power and. of the respon-
sibility that goes with it if our commissions are to operate effectively
in the larger industrial states. The writer has already pointed out
the advantages that accrue from (i) empowering the commission
upon occasion to overrule the advice of the boards and (2) giving
the executive officer of the commission a voting membership on both
the boards and the commission itself. The combination of these two
devices should go far toward helping to organize the information at
the commission's disposal and bringing it to bear impartially upon the
formation of a consistent policy.
3 . A more radical change in organization that might prove very ad-
vantageous in our larger states would be to place the whole minimum-
wage commission under the charge of the existing Department of
Labor, making of it an independent bureau with a special Deputy
Commissioner of Labor at its head. He would then become the
paid executive officer of the commission, taking over the repre-
sentative duties we were just now assigning to the secretary. This
^U. S. Bureau of Labor Statistics, Monthly Labor Review, Vol. VII, No. S,
1918, paraphrases and comments upon these two provisions as follows: "The
new act permits the Minister of Labor to apply its provisions to any trade in
which it appears to him that no adequate m'achinery exists for the effective
regulation of wages. It is thus possible to forestall an apprehended fall in
wages in view of changes or anticipated changes in conditions of employment.
. . . Rates may also be fixed to come into operation successively on the ex-
piration of specified periods, and variations in rates may be declared operative
pnly during specified periods,"
AMERICAN MINIMUM-WAGE LAWS 777
system would have the advantage of placing freely at the commis-
sion's disposal all the infonnation that could be gathered by the
department,^ as well as its full power of inspection and enforcement,
without giving up the commission's local autonomy.^ Its possible
disadvantage would be the transfer to the commission of any ineffi-
ciency that lurked in the department.
4. A most significant centralization in administrative methods
(as distinct from organization) that already has taken place in four
of our states is the widening in scope of wage awards. As has been
pointed out, the fixing of state- wide adult rates, combined with care-
fully specialized trade provisions for the inexperienced, marks the
opening of a new era in scientific standards.
5. A useful precursor to such standardization would be the regular
holding of regional conferences for groups of states that face the
same economic problems. Such a conference was held tentatively
and informally between the three Pacific coast states at the invita-
tion of the Washington Commission, just before that body called
together its own war-emergency conference. It is highly probable
that it was influential in the subsequent raising of the California
and Oregon rates to the uniform Washington level. Similarly, when
once the perennially reintroduced New York and {Pennsylvania bills
become law, a North Atlantic conference between these states and
Massachusetts (and perhaps by that time New Jersey) would cer-
tainly appear to be in order. In view of the sometimes wide variations
of the law between neighboring states it would of course be best
not to introduce any formality into these meetings, but to have the
understandings arrived at mere "gentlemen's agreements." As such
they should go far to allay interstate misunderstandings and break
the force of the constantly recurring employers' argument in regard to
throttling competition. They should certainly serve as a spur to the
laggard states in each group.
^Most of our existing laws provide that the department shall collect data
for the commission upon request, but so long as the two agencies remain separate
this is apt to cause friction. The new Texas law overcomes this difficulty by
providing that the head of the Bureau of Labor Statistics shall himself serve as
chairman of the new commission.
2 The new North Dakota law gives the task of wage-setting into the hands
of the existing Workmen's Compensation Bureau ; while the 1919 reorganization
act of Massachusetts transfers it to the three members of the newly created
Department of Labor and Industries who form the State Board of Conciliation.
778 TRADE UNIONISM AND LABOR PROBLEMS
In making all these specific recommendations we have not forgotten
that at the basis of all our reforms must lie a growth of public con-
fidence and interest in the work of the commissions. The chain of
minimum-wage activity can be no stronger than its weakest link,
which is the assistance every commission has to receive from the
public — in the form of adequate representation on its boards, at-
tendance at its hearings, support from the courts, and, above all,
adequate appropriations from the state legislature. The financial
difficulties under which some of our most progressive commissions
have been struggling make the degree of their success really astound-
ing.^ The commissions themselves must of course do all they can to
extend the field of their publicity. Whenever, as in the case of
Massachusetts, they have been blessed with sufficient funds, they have
indeed gone into print very vigorously, if somewhat learnedly. But
the larger and less dignified task of widespread popular appeal must
necessarily rest with the outside friends of the movement. If half
the energy that habitually goes to pushing minimum-wage campaigns
were carried over and devoted to popularizing the work of the com-
missions when once they have been established, the whole range of
problems we have been discussing would be immensely simplified.
Dorothy W. Douglas
Seattle, Washington
lis it, for example, generally known that the Oregon Commission has an
annual appropriation for all purposes (including secretary's salary, office ex-
penses, investigations, rent, publicity, inspection, and enforcement M of only
$3500?
XLIV
OPERATION OF THE INDUSTRIAL DISPUTES IN-
VESTIGATION ACT OF CANADA^
INTRODUCTION
OMITTING administrative details, the essential features of the
Canadian Industrial Disputes Investigation Act may be ex-
pressed in a statement of purpose and scope. The purpose of the act
as expressed in the complete title is "to aid in the prevention and
settlement of strikes and lockouts in mines and industries connected
with public utilities."^ Although the title thus disclaims restriction
of the right to strike or lock out and limits the scope to disputes in
industries affecting directly the public welfare, the act provides, that
a strike or lockout in these industries is illegal until the dispute has
been reported on by a board of conciliation and investigation and,
further, that industries other than those specified may be brought
within the scope of the act by agreement of both parties to the
dispute, the right to strike or lock out being suspended during an
investigation. This restriction upon the right to strike or lock out
pending an investigation has caused the act to be known generally as
the Compulsory Investigation Act.
The Canadian Industrial Disputes Investigation Act has been in
operation since March 22, 1907.^ The numerous reports appearing
as a result of official and personal inquiries in addition to the monthly
and annual publications of the Canadian Department of Labor are
evidences of the widespread interest in the results of the adminis-
tration of the act. For the most part, however, reports on the act
have dealt with disputes referred to boards for adjustment or in
1 Taken in part from the U.S. Bureau of Labor Statistics, Bulletin No. 233
(1918).
2 Scope extended March 23, 1916, by order O'f the Governor General in
council to include munitions of war industries.
^Amended May 4, 1910.
779
78o TRADE UNIONISM AND LABOR PROBLEMS
which application was made for such reference and, while directing
attention to violations and to disputes in which strikes or lockouts
were not averted by reference to boards, have not been concerned
in large measure with the question of illegal strikes and lockouts or
the enforcement of the penal provisions. Nevertheless, our chief
interest in the act as an experiment in government intervention is
not in its administration as a conciliatory measure, but in the
compulsory investigation and restrictive provisions of the act which
serve to characterize it.
Upon this point several observers have expressed opinions. Sir
George Askwith, Chief Industrial Commissioner of Great Britain,
visited Canada during the latter part of 191 2 for the purpose of in-
quiring into the working of the Industrial Disputes Investigation
Act. Speaking of the suitability of the Canadian act to Great Britain
and concluding his observations, Mr. Askwith says:
Where it (the Industrial Disputes Investigation Act) was frankly
accepted as a means of preventing disputes it has worked extremely
well, but where ... its introduction has been resented, it has not
succeeded to the same extent. In such latter cases where, by the
imposition of penalties, efforts have been made to enforce the act
the results have not been satisfactory.
The question then arises, What is the real value of the act, and
can any points in the act be suitably adapted to this country? Is
the restriction upon the right of proclaiming a lockout or strike so
much of the essence of the act as to make the act of no effect if such
restrictions were not compulsory? And do the penalties which are
proposed to be enforced for breach of the restrictions of the act add
to its value?
In my opinion the real value of the act does not lie in either of
these propositions, and certainly not in the second. The pith of the
act lies in permitting the parties and the public to obtain full knowl-
edge of the real cause of the dispute and in causing suggestions to be
made as impartially as possible on the basis of such knowledge for
dealing with existing difficulties, whether a strike or lockout has com-
menced or not. This action on behalf of the public allows an ele-
ment of calm judgment to be introduced into the dispute which at
the time the parties themselves may be unable to exercise.
It is claimed, and the claim is backed up by statistics, that the
restrictions upon a strike or lockout prior to such a judgment have
been of great assistance in causing a calm discussion or investigation
at an early date. If the power of giving such judgment had existed
without the restrictions, and if the various trades affected had been
THE INVESTIGATION ACT IN CANADA 781
gradually educated to see the advantage of discussion prior to a
dispute and had had the means by and through which such dis-
cussion could take place, it may be that practically similar results
would have been obtained, without the difficulty of having a law,
the complete enforcement of which is almost impracticable, and
which, while it has been accepted in cases where education has
existed, has been found very difficult in cases where the law is resented
and joint consent has not been in being.^
Writing in 19 10 for the United States Bureau of Labor Statistics
and under the heading "Suggested Amendments," Dr. Victor S.
Clark observes :
If men can strike with impunity in disregard of the law, what is
the value of the latter in preventing or postponing strikes ? Will the
act not fall into abeyance except in those minor and less acute dis-
putes where there is least call for government intervention? Has a
law any force at all that operates only by the tolerance of the law-
breakers? It should be recognized that expediency must constantly
be consulted in administering such an act; but it would seem that
the latter, though it may retain some residuary value as providing
convenient machinery for public mediation, must lose its distinctive
character and its interest as experimental legislation unless some way
is discovered to secure the observance of the clauses deferring strikes
and lockouts until after an investigation has been held. Unless these
clauses are enforced, the law becomes an ordinary conciliation act,
burdened by the discredit of its unenforced provisions.^
The same investigator in a paper before the Academy of Political
Science in the city of New York, November 22, 19 16, speaking of
illegal strikes in Canadian industries, remarked that :
No effort has been made in the past to punish a large body of
men for striking. This raises the question of the value of the penal
provisions of the law. It is argued that if the act does not put
strikers in jail and subject offending employers to heavy fines, these
provisions are useless. But even though violations are seldom prose-
cuted, neither strikers nor employers dare defy the law of the land
in disputes prominently before the public and affecting the pros-
perity and comfort of a large body of citizens. By doing so they
1 Report to the Board of Trade (Great Britain) on the Industrial Disputes
Investigation Act of Canada, 1907, by Sir George Askwith, K. C. B., K. C, Chief
Industrial Commissioner, p. 15.
2 "Canadian Industrial Disputes Investigation Act of 1907," by Victor S.
Clark, Ph.D., U.S. Department of Commerce and Labor Bulletin No. 86,
pp. 19, 20.
782 TRADE UNIONISM AND LABOR PROBLEMS
would put a powerful weapon in the hands of their opponents, and
they would fatally prejudice their case in the high court of public
opinion/
Honorable F. A. Acland, Deputy Minister of Labor for Canada
and Registrar of Boards of Conciliation and Investigation, writes :
Reference has been made to the strikes occurring in disputes which
had been before boards and had not been adjusted. There has been
also, in industries coming under the act, a considerable number of
strikes in disputes which have not gone before a board for investiga-
tion. Work ceased in these cases without regard to the act. Many
of the serious coal-mining strikes in western Canada during recent
years have occurred in this way.
What, it may be asked, becomes of the penalties prescribed for
these apparent infringements of the statute? The reply must be
that such cases have seldom gone to the courts. It has not been the
policy of the successive ministers under whose authority the statute
has been administered to undertake the enforcement of these provi-
sions. The parties concerned, or the local authorities, have laid
•information occasionally, and there have been in all eight or ten
judicial decisions. The mining industry has been the chief delin-
quent in the matter of infringements, and there have been occasional
derelictions on the part of the lower grades of transport or shipping
labor; in the higher grades of railway labor the act has been well
observed.^
DIFFICULTY OF MEASURING EFFECTIVENESS OF ACT
Before proceeding to an analysis of trade disputes occurring in
industries within the scope of the act, or brought within its scope by
the agreement of both parties to the dispute, it seems proper to
point out that statistics do not furnish incontrovertible evidence of
the success or failure of legislative measures to prevent or settle
strikes or lockouts, and to state that the inquiry upon which this
report is based was not made with the expectation of pronouncing
upon the value of the Canadian act in toto as an instrument for the
adjudication of labor disputes. To arrive at such a conclusion it
would be necessary to resort to laboratory methods — to assume a
1 Proceedings of the Academy of Political Science in the city of New York
Vol. VII, No. I, pp. IS, i6.
^Labor Gazette, April, 1916, p. 1118. (Reprint from Canadian Law Times
of March, 1916.)
THE INVESTIGATION ACT IN CANADA 783
static society upon which successive experiments might be tried under
identical conditions and to devise a means of recording concretely
human reactions to such experiments. It is axiomatic that social
and economic conditions make for industrial peace or unrest irrespec-
tive of antistrike or lockout legislation. Any attempt, therefore, to
compare, without correlation with other factors, the number of
trade disputes resulting in strikes or lockouts during a period prior
to the passage of measures for their adjustment with strikes and
lockouts during a subsequent period is open to serious objection.
Moreover, it is impossible to estimate the salutary effect of anti-
strike or lockout legislation in making for voluntary negotiations
and in preventing precipitate action whether or not the aid of such
legislation is directly invoked. It is apparent that accelerating
influences in some industries have served to discredit the value of
the Canadian act, whereas in other industries retarding influences
have tended measurably to decrease the number of strikes and lock-
outs and give undue credit to its restrictive provisions. Thus the
growth of unionism in the coal-mining industry has led to concerted
strike action for the establishment of union principles, approxi-
mately 50 per cent of the time lost in mining strikes during the
period 1907-1916 occurring in strikes for union recognition, for the
principle of the closed shop, or for the reinstatement of discharged
union employees. In industries connected with the operation and
maintenance of steam railways, on the other hand, unionism is more
generally recognized and the principle of the working agreement more
generally accepted. Measured solely by the number of strikes and
lockouts, the number of employees affected, or the time lost, it is
probable that any legislation would have evidenced merit in the
prevention of railway strikes and failure in the prevention of mining
strikes. It is idle to speculate as to how many strikes or lockouts
might have occurred in Canadian industries since the inception oi
the Industrial Disputes Investigation Act had that act not been
passed. It is incorrect to assume that every dispute referred under
the act would have resulted in a strike or lockout but for such
reference, even though a statutory declaration of intent to strike
or lock out is required before a board can be created. Any analysis,
therefore, must be made with a frank recognition that it is impossible
to measure absolutely and concretely the results of social legislation,
784 TRADE UNIONISM AND LABOR PROBLEMS
Apart from the interpretation of strike and lockout statistics is
the question of reliability of such information. It is safe to assume
that, in point of number, fewer strikes and lockouts escape public
attention subsequent to the inception of laws designed to prevent or
settle such disputes than for a previous period. The benefits from
such legislation may thus appear less than they really are because of
a more complete record of labor disturbances.
Moreover, if the importance of disputes is to be measured, it is
necessary to consider as well the numbfer of employees affected and,
if the dispute results in a strike or lockout, the time lost. Each of
these considerations offers new difficulties. However honest in intent
either side may be, it is natural for each to minimize the strength
of the other and to magnify its own position. The questions of
when a strike or lockout ends, how the time loss is to be measured,
how to determine the number of employees directly affected for the
purpose of computing such time loss, what consideration is to be
given to employees indirectly affected (especially in sympathetic
action and in declarations of intent to strike or lock out not resulting
in such action), are pertinent to any statistical analysis of trade
disputes and permit of wide latitude in interpretation.
So far as the employer is concerned, a strike is in being only if
the operation of his establishment is seriously interrupted, and termi-
nates when the operation is resumed; public recognition is most
keen when the strike reflects itself in inconvenience to the pub-
lic; whereas employees affected regard the strike as unsettled so
long as their organization remains intact and they are not returned
to their former positions. Conflicting reports as to the duration of
a strike and the number of employees affected are therefore not
unusual.
Undoubtedly the best index of the importance of a strike or lock-
out, apart from its immediate effect upon the pubUc welfare, is the
time loss. Remedial legislation, however, is most effective before a
dispute reaches the acute stage of a strike or lockout, and obviously
the importance of such legislation cannot be estimated by time loss
averted in disputes settled without cessation of work. Furthermore,
the time loss is at best but an approximate figure. It is usually deter-
mined by multiplying the number representing employees affected
by the number of workdays' duration, but this may lead to grave
THE INVESTIGATION ACT IN CANADA 785
inaccuracy in cases where the plant is operated with a reduced force
and the number of employees on strike varies from day to day.
Even greater inaccuracy arises in the use of figures representing
employees indirectly affected. A threatened coal strike might con-
ceivably affect indirectly every other industry in the country,
and, by the same analysis, every strike must affect indirectly em-
ployees in othqf industries. If such employees are to be considered
in an aggregate with employees directly affected, a definite rule must
be followed which should exclude, as too problematical for consider-
ation, those employees reported to be indirectly affected in contem-
plated strikes or lockouts and should include only those thrown out
of work as a direct result of strike or lockout.
An additional difficulty is encountered when an attempt is made to
harmonize a classification of disputes adopted prior to the enactment
of antistrike or lockout legislation with the classification adopted or
suggested by such legislation. Strikes and lockouts have been re-
ported by the Canadian Department of Labor since 1901. In these
reports the basis of classification is the industry, but no industrial
group as thus reported comes wholly within the scope of the Indus-
trial Disputes Investigation Act as interpreted by those administering
it. Thus, mining and quarrying constitute one group in the monthly
and annual summaries of trade disputes, but in the application of
the act quarrying has been excluded from its restrictive provisions.
Metal and shipbuilding trades constitute a group which would be
entirely without the scope of the act but for the inclusion of electrical
workers, linemen, and ship repairmen. Under the group "Gen-
eral Transport" are included street-railway employees, shipping
employees, steam-railway employees, and teamsters. Teamsters have
been considered as within the scope of the act, however, only when
their work is connected with the handling of freight at terminals.
The group "Unskilled Labor," while mainly outside the restrictive
provisions of the act, may contain laborers who, by virtue of the
work performed in connection with certain public utilities, belong
properly within the scope of the act. Moreover, the Industrial Dis-
putes Investigation Act is not applicable to disputes involving fewer
than 10 employees, whereas strikes and lockouts are reported in all
cases where 6 or more employees are involved.^ On the other hand,
the applicability of the act is not determined by the duration of the
786 TRADE UNIONISM AND LABOR PROBLEMS
strike or lockout, whereas it is a rule of the Canadian Department
of Labor not to report strikes or lockouts of less duration than
twenty-four hours.
SCOPE OF ACT
Obviously any attempt to measure the effectiveness of the Cana-
dian act must be preceded by a consideration of -the scope of the
act. In the absence, however, of any interpretation having the
force of a legal opinion, it is impossible to establish an inflexible
rule of action.
To the extent that the act is administered as a conciliatory and
not as a coercive measure, it would obviously be unwise for officials
to pronounce upon the legality of strikes and lockouts not coming
before a board, lest the circumstances surrounding subsequent similar
disputes necessitate a reversal of opinion.
It is recognized, too, that if doubt exists as to the enforceability of
provisions, the measure containing them is often more useful if pur-
posely indefinite and if discretion is permitted in its application.
Conversely, if discretion is permitted, the question of expediency
plays so important a role that anticipation of action might serVe to
defeat its purpose.
If, on the other hand, an effort is being made to administer the
act strictly as a compulsory measure, an admission of illegality must
necessarily reflect upon the enforceability of the provisions of the
act or upon its administration. In either case subsequent applica-
tion of the provisions would be more difficult.
The safest course, no doubt, and the one taken in the analysis pre-
sented later, is to assume that when the Minister of Labor constitutes
a board of conciliation and investigation upon the application of one
party to a dispute it amounts to a decision that the act applies to
that class of disputes. Such action by the Minister of Labor, how-
ever, does not constitute a precedent which either he or subsequent
ministers are bound to follow, nor does it in any way limit the right
of either party to apply for an injunction seeking to restrain a board
from proceeding, on the ground that the act does not apply to a
particular dispute.
The act applies to "disputes in mining property, agency of trans-
portation or communication or public service utility including
THE INVESTIGATION ACT IN CANADA 787
. . . railways, whether operated by steam, electricity, or other motive
power, steamships, telegraph and telephone lines, gas, electric light,
water and power works" involving ten or more employees in skilled
or unskilled manual or clerical work. It should be noted, too, that
the act applies only to disputes in which the controversy has reached
a stage such that, " failing an adjustment of the dispute or a reference
thereof by the minister to a board, ... a lockout or strike will
be declared . . . and that the necessary authority to declare such
lockout or strike has been obtained."- It is provided further that
the violation of privileges, rights, and duties of employers or em-
ployees does not constitute a dispute in the meaning of the act if
such violation is in itself an indictable offense. Subject to these limi-
tations and to the provision that for disputes in industries not speci-
fied in the act both parties must concur in the application, it is
possible for disputes in all industries to be referred for adjustment,
but in this respect the act is simply a conciliatory measure with
provision for voluntary arbitration.
From the circumstances surrounding the inception of the act —
a prolonged coal strike — it might be inferred that the term "min-
ing" had reference to coal mines. Boards have been created, how-
ever, for metal miners, and asbestos miners have been considered
within the scope of the act. "Transportation" permits of greater
latitude in interpretation, but it is not clear whether the phrase
" agency of transportation " is intended to be defined as " railways
. . . operated by steam, electricity, or other motive power," or
whether the inclusion of specific means excludes other means. Thus
far it seems to have been the policy of the department to include
without question the operation and maintenance of steam, electric,
and water transportation agencies serving as public carriers. Team-
sters have been considered as a transportation agency, as previously
stated, when their work is intimately connected with the handling of
freight at the ends of transportation lines. The same reasoning,
however, would lead to the inclusion of transfer companies carrying
passengers and baggage and might conceivably embrace the employees
of any concern doing general transfer work for the public whether
by team, motor truck, or taxicab. The maintenance of such transfer
agencies would undoubtedly bring within the scope of the act in-
dustries not contemplated by those who framed it, yet the relation
788 TRADE UNIOIsfiSM AND lABOR PROBLEMS
of a blacksmith shop, a harness shop, a public garage, a paving crew,
or a road gang to certain forms of public transportation is somewhat
similar to the relation whifeh a roundhouse, a railway machine shop,
br a section gang — in whieh latter industries the act has been held
to be applicable — bears to steam railways. The construction of
transportation facilities has been excluded in the application of the
act, but it is sometimes difficult to determine where maintenance
leaves off and construction begins.
Somewhat more indefinite. is the expression "industries connected
with public utilities." The term public utility has not received legal
interpretation in Canada and admits of a large measure of discretion
in its use. In Australasian states public utilities include the supply
and distribution of electricity for light or power; gas for lighting,
cooking, or industrial purposes ; water for domestic purposes ; the
supply of milk and the slaughtering or supply of meat for domestic
consumption ; the production or distribution of any article of food
the deprivation of which might tend to endanger human life or
cause serious bodily injury ; the working of any ferry, tramway, or
railway used for the public carriage of goods or passengers ; and the
production and distribution of coal. In the application of the
Canadian act occupations connected with the supply and distribution
of gas, electricity, and water for domestic consumption are admittedly
within the scope of the act, though the guiding principle of the
relation to the public welfare might conceivably bring other indus-
tries within the list of public utilities.
METHOD OF REFERRING DISPUTES UNDER THE ACT
As stated previously, the act denies the right to strike or lock out
in certain industries until the matters in dispute have been investi-
gated and reported on by a board of conciliation and investigation
appointed by the Minister of Labor. It is provided, however, that
the initiative in such an investigation must be taken by one of the
parties- to the dispute. That is, before a board can be appointed
either employer or employees must make formal request for an inves-
tigation. If the dispute occurs in an industry not within the scope
of the restrictive provisions of the act, employer and employees
must concur in the request before a board can be appointed. After
THE INVESTIGATION ACT IN CANADA 789
the application has been made in accordance with the provisions of
the act, it rests with the Minister of Labor whether a board shall be
appointed.
The act provides that the board shall consist of three members,
one "appointed on the recommendation of the employer, and one on
the recommendation of the employees (the parties to the dispute),
and the third on the recommendation of the members so chosen." In
case of failure by either party to recommend within prescribed time
limits, the minister appoints without such recommendation. If the
two members first appointed fail to agree upon a recommendation
for the third member within prescribed time limits, the minister
selects the third member. The appointment of the third member
completes the board.
There are thus three distinct steps involved before a dispute is
referred under the act: (i) an application for reference; (2) a de-
cision by the minister to constitute a board of conciliation and investi-
gation; and (3) the appointment of such a board. It is important
to keep these distinctions in mind, because some applications for
reference do not receive favorable consideration and some boards
are not constituted even after the Minister of Labor has decided in
favor of such action.
In its publications of proceedings under the act the Canadian
Department of Labor does not report applications for reference in
which ( I ) a board was refused ; ( 2 ) a settlement was effected be-
fore action was taken by the Department of Labor looking to the
establishment of a board; or (3) the department was unable to act
owing to the refusal of one party to concur in the application.
CLASSIFICATION OF DISPUTES
Disputes occurring in industries within the scope of the act may be
divided broadly into two groups : strikes and lockouts, and disputes
not resulting in strikes or lockouts but in which statutory declara-
tion of intent to take such action was made. It is apparent that the
disputes in the second group are identical with disputes not result-
ing in strikes or lockouts referred under the act or, as explained
in a previous section, in which application was made for reference
and action taken by the Department of Labor contemplating the
790 TRADE UNIONISM AND LABOR PROBLEMS
establishment of boards of conciliation and investigation. Obviously
there have been disputes in industries within the scope of the act
adjusted without the occurrence of a strike or a lockout and without
application for reference but which may not be included in this group
because technically they are not within the scope of the act until
an application for reference has been legally made.
The second group, then, of disputes within the scope of the act
is made up of disputes not resulting in strike or lockout which are
within the scope of the act by virtue of an application for reference
made in compliance with the provisions of the act and in which it
was the intent of the department to create a board.
In the proceedings under the act disputes may also be divided
into strikes and lockouts, and disputes not resulting in strikes or
lockouts. Both groups are restricted to disputes in which ( i ) boards
were constituted within the meaning of the act or ( 2 ) application was
made for reference and action taken by the Department of Labor con-
templating the establishment of a board. Each group may thus in-
clude disputes in which boards were not constituted. However, by
ruling of the Canadian Department of Labor, all applications for
reference in which steps have been taken by the department toward
the establishment of a board are reported in the official proceedings
under the act. In both groups also a statutory declaration of intent '
to strike or lock out was made, but in some disputes the strike or
lockout occurred before application was made for reference under the
act and the declaration of intent was thus only a perfunctory
procedure.
Considering only the intent of the act, which is to avoid interrup-
tion to industry, any strike or lockout occurring in industries within
its scope indicates a failure of the act. Whether this failure occurs in
spite of a strict observance of the restrictive provisions of the act or
is marked by an attitude of indifference toward, or open defiance
of, such provisions, or by a lack of confidence in boards of concilia-
tion and investigation, is best shown by the time of occurrence of
strikes and lockouts. Thus, strikes and lockouts occurring after
boards of conciliation and investigation have been given opportunity
to adjust the points in controversy indicate the greater failure,
although the parties involved in such strikes and lockouts are strictly
law-abiding in the sense that they observe the restrictive provisions
THE INVESTIGATION ACT IN CANADA 791
of the act. Strikes and lockouts commencing prior to an application
for reference, but terminating before a board has been legally con-
stituted, may indicate ignorance of the act or its applicability to
particular disputes. Although such strikes or lockouts are illegal,
the offense is palliated somewhat, since after the act was recognized
in a formal application for reference the disputants became law-
abiding, the matters in dispute being held in abeyance pending an
investigation. Strikes and lockouts commencing prior to an applica-
tion for a board and continuing after the board is constituted indi-
cate either that the dispute was referred contrary to the wishes of
one of the disputants or that, while willing to accept the services
of a board, one or the other was unwilling to yield the right to strike or
lock out and did not regard the penal provisions seriously. Strikes and
lockouts commencing after the application for a board but before
the investigation is completed may be protests against delay in con-
stituting the board or in completing the investigation, or may indicate
a lack of confidence in the board. In either case a disregard for the
penal provisions is shown.
It has seemed desirable to make a distinct group of strikes and
lockouts occurring in industries within the scope of the act without
any attempt's being made to invoke its aid. It is the practice of the
Canadian Department of Labor when an illegal strike or lockout
occurs or is imminent to bring such illegality to the attention of the
disputants and explain the purpose of the act. This group indi-
cates an open defiance of the penal provisions in that neither party
was willing to make application for a board of conciliation and
investigation.^
COMPARISON OF DISPUTES IN INDUSTRIES WITHIN THE
SCOPE OF, AND IN PROCEEDINGS UNDER, THE ACT
All Disputes
During the period March 22, 1907, to December 31, 1916, there
have occurred in industries within the scope of the act 222 disputes
resulting in strikes and lockouts, affecting 100,608 employees, whose
^In a few instances application was made for reference but no steps were
taken by the department looking to the establishment of a board, and the cases
are not ofadally reported as applications for reference.
792 TRADE UNIONISM AND LABOR PROBLEMS
time loss was 4,838,647 working-days. In 44 of these, involving
44,086 employees and a time loss of 3,665,969 days, application was
made for reference under the act. Of this number, 18 disputes,
affecting 20,330 employees and occasioning a time loss of 1,822,803
days, did not result in strikes or lockouts until after the investigation
and report of a board and consequently were legal. Thus there have
been 204 illegal strikes and lockouts, affecting 80,278 employees,
whose time loss was 3,015,844 days. Of this number, 178 disputes,
involving 56,522 employees and a time loss of 1,172,678 days, oc-
curred without either party to the dispute seeking to invoke the
aid of the act.
A further analysis of the strikes and lockouts in which applica-
tion was made for reference under the act shows that 9 strikes, in-
volving 4606 employees and a time loss of 38,070 days, began prior
to the application for a board but were called off prior to the com-
pletion of the board, the matter in dispute being held in abeyance
pending an investigation ; 5 strikes, affecting 3950 employees, whose
time loss was 46,650 days, began prior to the application for
a board and were adjusted before a board was constituted ; 5
strikes, affecting 11,034 employees, whose time loss was 1,623,456
days, began prior to the application fdr a board and continued after
the board was constituted; 7 strikes, affecting 4166 employees
and resulting in a time loss of 134,990 days, began after the appli-
cation for a board but before its report.
In addition to the 44 strikes and lockouts in the adjudication of
which the act was invoked, 173 disputes, affecting 141,295 employees,
not resulting in strike or lockout but in which statutory declaration
of intent to take such action was made, were referred to boards of
conciUation and investigation under the act, or application was made
for such reference and action taken by the Department of Labor con-
templating the establishment of such a board. In 36 of these dis-
putes, affecting 34,14s employees, a settlement was reported before
a board was constituted; in 137 disputes, affecting 107,150 em-
ployees, boards were constituted. How many of these 137 disputes
would have resulted in strikes or lockouts but for reference under
the act is problematical. It will be interesting, however, to examine
those disputes in which appHcation was made for reference, such
application being accompanied by the statutory declaration that,
THE INVESTIGATION ACT IN CANADA 793
failing an adjustment or a reference, a strike or lockout would result,
but for which boards were not constituted.
Of applications in which boards are not constituted only those are.
reported in the official proceedings in which action is taken by the
Department of Labor looking to the establishment of a board. Of
the disputes thus reported, reference has been made to 5 strikes,
affecting 3950 employees, and to 36 disputes not resulting in strike
or lockout, affecting 34,145 employees, in which boards were not
constituted. Of the five strikes, all began prior to the application
for boards and could not have been precipitated by a failure of
reference. Of applications in disputes not reported in the proceedings
under the act, 14 disputes, affecting 8247 employees, were in indus-
tries not within the scope of the act and for which the department
was unable to grant boards owing to the lack of concurrence of both
parties to the disputes. Of these 14 disputes, 6 disputes, affecting
6465 employees, resulted in strikes prior to the applications for
boards, and the inability of the department to apply the act could
not be advanced as a reason for the strikes ; i strike, affecting 96
employees, commenced the same day the application was received,
but presumably not until the other party to the dispute had refused
to concur in the request for a board.
Summarizing the figures of the preceding paragraph, it will be
observed that there were 55 disputes, affecting 46,342 employees, in
which application was made for reference but in which boards were
not constituted.^ In 11 of these disputes, affecting 10,415 employees,
a strike occurred prior to the application for reference. In 44 dis-
putes, affecting 35,927 employees, a strike or lockout did not occur
prior to the application for reference, and of these, 43, or 97.7 per
cent of the disputes, affecting 35,833, or 99.7 per cent, of the em-
ployees, were adjusted without the occurrence of a strike or lockout.
It is recognized, however, that the formal action of applying for a
board may in itself make for a resumption of negotiations between
the parties to a dispute and, too, that after the application is received
the department is in a favorable position to serve as a conciliatory
1 Other applications for reference, not reported officially, in which boards
were refused for technical or other reasons, or in which settlements were
effected before action was taken by the department, are not considered in
this analysis.
794 TRADE UNIONISM AND LABOR PROBLEMS
or mediatory agency and may aid in securing a settlement before
a board is completed. It is recognized, too, that disputes settled
without the occurrence of a strike or lockout and without reference to
boards may not have presented the same degree of difficulty in adjust-
ment as disputes referred to boards. To the extent, however, that
the statutory declaration of intent to strike or lock out indicates the
seriousness of the controversy, all disputes are on a parity. Meas-
ured thus, it is apparent that of the 137 disputes referred to boards
and not resulting in strike or lockout a considerable number would
have been adjusted without the occurrence of strikes or lockouts even
though not referred to boards.
Viewed strictly as a conciliatory measure, the usefblness of the act
should be reflected in the applications for reference under Section 63,
whereby the concurrence of both disputants is necessary in disputes
outside specified industries before a board can be created. There
was a total of 26 apphcations under Section 63, in disputes affect-
ing 13,781 employees. In 12 disputes, affecting 5534 employees,
boards were constituted ; in 14 disputes, affecting 8247 employees,
the department was unable to act, owing, as previously stated, to the
absence of joint consent of the disputants. During the same period
there occurred a total of 691 strikes and lockouts, affecting 149,812
employees, whose time loss was 3,254,332 working-days, in industries
not within the scope of the act but which might have been brought
within its scope by agreement of both parties to the disputes.
Mining
An analysis of mining disputes for the period under consideration
shows that 75 strikes or lockouts occurred, affecting 59,304 em-
ployees and occasioning a time loss of 3,973,381 days. Of this
number, 50 strikes, affecting 33,775 employees, whose time loss was
967,780 days, occurred without reference to the act, and 25 strikes,
affecting 25,529 employees, whose time loss was 3,005,601 days,
were referred under the act or application was made for reference.
Of the strikes referred under the act, 4, affecting 1591 employees,
whose time loss was 21,525 days, occurred prior to application for
reference but terminated prior to the completion of a board and
pending its investigation and report ; 4 strikes, affecting 10,034 em-
ployees, whose time loss was 1,585,456 days, commenced prior to an
THE INVESTIGATION ACT IN CANADA 795
application for a board and continued after the board was consti-
tuted; 5 strikes, affecting 3825 employees and occasioning a time
loss of 69,785 days, commenced after the application for a board
but before its report; 10 strikes, affecting 8229 employees, whose
time loss was 1,316,085 days, commenced after the investigation and
report of a board ; in 2 strikes, affecting 1850 employees, whose
time loss was 12,750 days, a board was applied for but not com-
pleted. Of the disputes not resulting in strike or lockout referred
under the act, or in which application was made for reference and
action taken by the Department of Labor contemplating the estab-
lishment of a board, 34 disputes, affecting 24,670 employees, were
mining disputes. In 5 of these disputes, affecting 2860 employees,
a settlement was effected before boards were completed.
Railways
A similar analysis of disputes connected with the operation and
maintenance of steam railways shows that 62 strikes or lockouts
occurred, affecting 24,187 employees and occasioning a time loss of
724,134 days. Of this number 50 strikes, affecting 9016 employees,
whose time loss was 90,970 days, were not referred under the act,
whereas 12 strikes, affecting 15,171 employees, whose time loss was
633,164 days, were referred under the act. Of the strikes referred
under the act, or in which application was made for reference, 3,
affecting 1155 employees, whose time loss was 5085 days, com-
menced prior to application for reference but terminated prior to
the completion of a board and pending its investigation and report ;
I strike, affecting 1000 employees, whose time loss was 38,000 days,
commenced prior to application for a board and continued after the
board was constituted ; 2 strikes, affecting 341 employees, whose time
loss was 65,205 days, commenced after the application for a board
but before its report; 5 strikes, affecting 11,275 employees, whose
time loss was 496,874 days, commenced after the investigation and
report of a board ; in i strike, affecting 1400 employees, whose time
loss was 28,000 days, a board was applied for but not constituted.
Of the disputes not resulting in strike or lockout in which applica-
tion was made for reference, 76, affecting 93,200 employees, were
railway disputes. Of this number, 23 disputes, affecting 29,843 em-
ployees, were adjusted before a board was constituted.
796 TRADE UNIONISM AND LABOR PROBLEMS
OPERATION OF ACT AS BETWEEN SUCCESSIVE PERIODS
The period March 22, 1907, to December 31, 1916, may be con-
veniently divided into two periods of approximately five years each.
Whether there were fewer or more disputes resulting in strike or lock-
out, or in which the intent to take such action was declatpd, in one
period than in the other is not in itself conclusive. It might be
expected, however, that greater familiarity with the purpose, scope,
and operation of* the act would lead to its application in a greater
percentage of disputes arising in industries within its scope. It might
also be expected that with the greater undesirability of interruption
to industry arising out of participation in the European conflict the
relative importance of a governmental agency for the adjudication of
labor disputes would be augmented. It should be fruitful, there-
fore, to. compare the periods 1907-1911 and 1912-1916 as to the
ratio of disputes referred and disputes within the scope of the Indus-
trial Disputes Investigation Act.
During the period March 22, 1907, to December 31, 1911, there
were 118 strikes and lockouts, affecting 62,344 employees, whose
time loss was 3,620,346 working-days, in industries within the scope
of the act. For the same period there were 92 statutory declarations
of intent to strike or lock out, involving 70,175 employees, but in
which such strike or lockout did not occur. During the period Jan-
uary I, 1912, to December 31, 1916, there were 104 strikes and
lockouts, affecting 38,264 employees and occasioning a time loss of
1,218,301 working-days, and 81 statutory declarations of intent to
strike or lock out not resulting in such action, affecting 71,120 em-
ployees, in industries within the scope of the act.
In the mining industry during the period March 22, 1907, to
December 31, 1911, there were 46 strikes and lockouts, affecting
36,028 employees, whose time loss was 2,906,859 working-days.
For the same period there were 27 statutory declarations of intent
to strike, involving 20,440 employees, but in which such strike or
lockout did not occur. During the period January i, 191 2, to Decem-
ber 31, 1916, there were 29 strikes and lockouts, affecting 23,276
employees and occasioning a time loss of 1,066,522 working-days,
and 7 statutory declarations of intent to strike or lock out not result-
ing in such action, affecting 4230 employees.
THE INVESTIGATION ACT IN CANADA 797
In the operation of railways during the first period there were 30
strikes and lockouts, affecting 17,339 employees, whose time loss
was 640,035^ working-days, and 44 statutory declarations of intent
to strike or lock out not resulting in such action, affecting 40,852 em-
ployees. During the second period there were 32 strikes and lockouts,
affecting 6848 employees, whose time loss was 84,099 working-days,
and 32 statutory declarations of intent to strike or lock out, involving
52,348 employees, but in which such strike or lockout did not occur.
On the basis of the above it would appear that the act was suc-
cessful in avoiding unrest in that fewer disputes occurred during the
second five years of operation than during the first five years. As
stated previously, however, there is no way of determining how
many disputes might have occurred but for the operation of the act.
A better measure of effectiveness will be found in the relative pro-
portion of disputes within the scope of the act to disputes referred
under the act during the two periods.
From the inception of the act until December 31, 1911, boards
were constituted for 22.9 per cent of strikes and lockouts in indus-
tries within the scope of the act, for 56.5 per cent of the employees
affected, and for 93.7 per cent of the working-days lost in such strikes
and lockouts, as against 11.5 per cent of the strikes and lockouts, 12.9
per cent of the employees affected, and 18.5 per cent of the working-
days lost during the period January i, 1912, to December 31, 19 16.
Of statutory declarations of intent to strike or lock out in industries
within the scope of the act, boards were constituted for 36.2 per cent
of the disputes and for 45.8 per cent of employees affected during
the first period as against 33 per cent of the disputes and 42.5
per cent of the employees affected during the second period. Of
all disputes within the scope of the act, boards were constituted for
49.1 per cent during the first period and for 39.5 per cent during
the second period. Of all employees affected in disputes within the
scope of the act, boards were constituted for 72.4 per cent during
the first period as against 47 per cent during the second period.
Relatively, then, a much smaller percentage of disputes within the
scope of the act were referred to boards during the period 191 2-
1916 than during the period 1907-1911.
1 Including 44,000 days lost in 1912 on account of a strike which began and
was referred under the act prior to 1912.
798 TRADE UNIONISM AND LABOR PROBLEMS
A similar analysis of disputes in the mining industry shows that of
all mining disputes, boards were constituted for 56.2 per cent during
the first period as against 30.5 per cent during the second period,
and for 69.2 per cent of the employees affected as against 23.3 per
cent. If only strikes and lockouts are considered, the per cent is
39.1 as against 17.2 for such strikes and lockouts; 57.5 as against
8.3 for employees affected ; and 96.8 as against 16.8 for working-
days lost.
The act is conceded to have been most successful in its application
to railway disputes, yet boards were constituted for 55.3 per cent
of the railway disputes during the first period as against 36 per cent
during the second period, and for 78.9 per cent of the employees
affected as against 52.7 per cent. Of all railway strikes and lock-
outs, boards were constituted for 23.4 per cent during the period
1907-1911 as against 12.5 per cent during the period 1912-1916;
for 71.2 per cent of the employees affected as against 20.7 per cent ;
and for 87.7 per cent of the working-days lost as against 51.8 per
cent.
VIOLATIONS OF THE ACT
The act provides that in designated industries "It shall be unlaw-
ful for any employer to declare or cause a lockout, or for any em-
ployee to go on strike on account of any dispute prior to or during
a reference of such dispute to a board of conciliation and investiga-
tion . . ."^; that "Any employer declaring or causing a lockout
contrary to the provisions of this act shall be liable to a fine of not
less than |ioo nor more than $1000 for each day or part of a day
that such lockout exists''^ ; that "Any employee who goes on strike
contrary to the provisions of this act shall be liable to a fine of not
less than $10 nor more than $50 for each day or part of a day that
such employee is on strike "^j and that "Any person who incites,
encourages, or aids in any manner any employer to declare or con-
tinue a lockout or any employee to go or continue on strike contrary
to the provisions of this act shall be guilty of an offense and liable
to a fine of not less-than Iso-nor more than $1000."*
1 Canadian Industrial Disputes Act, Section 56. sj^id Section ?o
'Ibid. Section S8. .^^i^; s,,y„„ ^^;
THE INVESTIGATION ACT IN CANADA 799
It is impossible to measure the influence of the penal provisions
in restraining employers and employees from illegally interrupting
industry, or others from inciting such action. A comparison, how-
ever, of violations with prosecutions will indicate the attempt made
to enforce these provisions and the importance attached to them.
During the period March 22, 1907, to December 31, 1916, as stated
previously, there were 204 illegal strikes and lockouts, affecting
80,278 employees, whose time loss was 3,015,844 working-days. Of
these 204 strikes or lockouts, 65, affecting 51,075 employees and
occasioning a time loss of 2,657,296 working-days, were in mining,
and 57, affecting 12,912 employees, whose time loss was 227,260 days,
were in railways.
Expressed as percentages, it will be observed that of all strikes and
lockouts in industries within the scope of the act, 91.9 per cent of
such strikes and lockouts, affecting 79.8 per cent of the employees
and occasioning 62.3 per cent of the time loss, were illegal. Mining
contributed 31.9 per cent of the illegal strikes and lockouts, 63.6 per
cent of the employees affected, and 88.1 per cent of the working-days
lost in illegal strikes and lockouts. Railways contributed 25.6 per
cent of the illegal strikes and lockouts, 12.8 per cent of the em-
ployees affected, and 4.7 per cent of the working time lost in illegal
strikes and lockouts. Of all mining strikes, 86.7 per cent, affecting
86.1 per cent of striking miners and occasioning 66.9 per cent of the
time lost in mining, were illegal. Of all railway strikes, 91.9 per
cent, affecting 53.4 per cent of striking railway employees and occa-
sioning 31.4 per cent of the time lost in railways, were illegal.
Of the total number of illegal strikes and lockouts, 2 disputes,
affecting 95 employees, whose time loss was 390 days, must be consid-
ered lockouts. Assuming the minimum penalty, it will be observed
that the aggregate of penalties which might have been imposed ex-
ceeds $30,000,000. If the maximum penalty is assumed, the amount
exceeds $150,000,000. This does not take account of the violations
of Section 60 in inciting to illegal strikes, although it is probable
that in every illegal strike there are violations of this section.
A comparison of illegal strikes and lockouts for the periods
March 22, 1907, to December 31, 1911, and January i, 1912, to
December 31, 1916, shows that for the first period 90.7 per cent of the
strikes and lockouts occurring in industries within the scope of the act
Soo TRADE UNIONISM AND LABOR PROBLEMS
were illegal, as against 93.3 per cent during, the second period. The
employees affected in illegal strikes and lockouts constituted 71.2 per
cent of employees affected in all strikes and lockouts in industries
within the scope of the act during the first period, as against 93.7 per
cent during the second period. The working-days lost in illegal strikes
and lockouts during the first period was 53.7 per cent of the time lost
in strikes and lockouts in all industries within the scope of the act, as
against 86.8 per cent in the second period. A similar analysis for
mining shows that of all mining strikes and lockouts during the first
period, 84^8 per cent of such strikes and lockouts, affecting 82 per
cent of the employees and occasioning 60.2 per cent of the time
loss, were illegal, as against 89.7 per cent of mining strikes and
lockouts, affecting 92.5 per cent of the employees and occasipning
85.1 per cent of the time loss, during the second period. In railways,
90 per cent of the strikes and lockouts, affecting 37.2 per cent of the
employees and occasioning 17.5 per cent of the time loss, were illegal
during the first period, as against 93.7 per cent of the strikes and
lockouts, affecting 94.5 per cent of the employees and occasioning
95.8 per cent of the time loss, during the second period.
PROSECUTIONS UNDER THE ACT
During the period March 22, 1907, to December 31, 1916, there
were 11 prosecutions for alleged violations of the act. Of these, i
was to test the constitutionality of the act and to restrain a board
of conciliation and investigation from proceeding ; i was to enforce
an agreement entered into as a consequence of the recommendations
of a board ; 7 were prosecutions for illegal strikes or for inciting such
action; 2 were for illegal lockouts. In all, charges have been laid
against 9 employees for violating the provisions of Section 60 by the
encouragement of strikes and against 1 1 employees for violating the
provisions of Section 56 by going on strike illegally. Charges have
been laid against 3 employers for violating the provisions of Section
56 by illegal lockouts. In the case of 11 employees the charge was
either dismissed or withdrawn ; in the case of 9 employees the charge
was sustained. Charges against 2 employers were sustained ; charges
against i employer were dismissed. The aggregate of fines imposed,
exclusive of costs, was I1660.
THE INVESTIGATION ACT IN CANADA Sol
CONCLUSION
It may be repeated that the chief interest in the Canadian Indus-
trial Disputes Investigation Act is not in its administration as a
conciliatory measure but in those restrictive provisions which have
served to characterize it as the Compulsory Investigation Act. It
is clear that the provisions have not been enforced ; that continued
administration of the act has been accompanied by an increase in
the percentage of illegal strikes and lockouts and by a decrease in
the percentage of disputes within the scope of the act in wTiich the
act was applied. The question naturally arises as to the value of the
restrictive provisions if they are not enforced. The answer to this
must be sought in the spirit of the act, its administration, and its
violation.
Obviously, the restrictive provisions of the act were intended to
avoid interruption to industries intimately related to the public
well-being. True, the ultimate right to strike or lock out was not
denied, and in this respect the act may be said to recognize such
right subject to limitations and thus to differ from legislation that
prohibits absolutely the right to strike or lock out. In underlying
principle, however, there is little difference. Both are predicated on
the principle that private rights cease when they become public
wrongs. Although the wrong is undoubtedly greater when it results
from ill-advised or precipitate interruption to industries whose con-
tinuous operation is vital to public welfare, it is not clear that the
wrong would be wholly lacking even though a strike or lockout did
not occur in these industries until such action was legally permissible.
The act was written after a prolonged coal strike had seriously
interfered with public well-being and had focused attention upon
tie dangers of a prolonged industrial warfare in this and other
industries in which the public is largely concerned. It was written
by a Parliament in which the conservative element precjominated.
The previous experience in Canada with the Conciliation and Labor
Act and with the Railway Labor Disputes Act and the experience in
other countries, particularly Australia, undoubtedly exercised no
little influence in determining the character of the act of 1907.
Experience in Australia had shown that absolute prohibition of
strikes and lockouts was difficult to enforce. It is probable that the
8o2 trade; unionism and labor problems
framers of the Canadian act recognized this and sought to avoid the
difficulty by limiting the act to industries in which the public had
an immediate interest and by imposing in these industries only tem-
porary restriction, that the full force of public opinion might be
brought to bear upon precipitate action.
Certain other provisions indicate that the Australian experience
was in mind. Thus the Canadian act provides that only those
disputes may come before a board in which, " failing an adjustment
of the dispute or a reference thereof by the minister to a board,
... a lockout or strike will be declared . . . and that the neces-
sary authority to declare such lockout or strike has been obtained."
The purpose of these provisions was, on the one hand, to prevent
a multiplicity of trivial cases' clogging the administrative machinery
and perhaps giving a serious aspect to disputes capable of self-
adjustment and, on the other hand, — recalling that the act was
written by a conservative Parliament in which the working classes
had little representation, — to limit the encouragement to organiza-
tion arising inevitably from government arbitration.
On the first of these points — restricting the application of the act
to the more serious disputes — it may be remarked that the required
statutory declaration of intent to strike or lock out may come to be
merely perfunctory. If authority to declare a strike or lockout is
necessary before a dispute may be referred under the act, it is appar-
ent that the granting of such authority may be looked upon simply
as a formality. It has been shown elsewhere in this report that a
considerable number of such declarations did not result in strike or
lockout, even though boards were not created.
On the second point' — limiting government encouragement of or-
ganization^— little can be said in its support without attacking the
principle of government intervention and denying the value of labor
organization. Certainly a board of investigation or arbitration must
deal with representatives of employees, and this in itself implies
collective action through organization. During the proceedings be-
fore such a board it is often necessary that employers meet and
discuss differences with representatives of labor. But while com-
pulsory investigation or arbitration makes organization of employees
necessary and leads indirectly to the recognition of officials of these
organizations by employers, it tends, in some cases at least, toward
THE INVESTIGATION ACT IN CANADA 803
the establishment of more cordial relations between employers and
union officials and the forming of the habit of negotiation which may
conceivably increase the number of self-adjustments. To limit the
scope of government intervention on the ground that it encourages
the growth of unions is, after all, but to deny the right of men to
organize and to deal collectively.
One other feature of the act should be mentioned because of its
effect upon the administration of the act. No permanent board of
conciliation and investigation is provided. For each dispute a new
board is created. Upon filing its report with the Minister of Labor
the board ceases to exist. This lack of a permanent board undoubt-
edly has advantages and disadvantages. It avoids the lasting dis-
credit of an unsatisfactory decision. If, in the opinion of either side,
one board fails, there is always the chance of a better deal next time
with a different board. Moreover, there is a feeling of direct rep-
resentation of interests when each side to a dispute has the oppor-
tunity of naming a member of the board. On the other hand, however,
there is always more or less delay in creating and assembling
a board and for the board to get acquainted with the routine of
procedure. Many disputes are of such a nature that only quick
action will avert a strike or lockout. This is possible only with a
permanent body ready for action. Then, too, conciliation calls for
a large degree of skill in dealing with industrial disputes. A tem-
porary board cannot be expected to handle disputants as tactfully
as a permanent and more experienced board.
The absence of a permanent board gives rise to another disadvan-
tage in attempting to carry out a decision. It is seldom that a wage
award or a set of working conditions can be put into effect without
numerous questions' coming up respecting interpretation. Charges
of deliberate violation of the terms of the agreement are often made
and delays in securing official interpretation may aggravate the sit-
uation to a point where a strike or lockout occurs even though the
parties have previously signified a willingness to accept the decision.
In this it must be borne in mind that the decisions of Canadian
boards of investigation are not binding upon the parties to the dis-
putes, and it is therefore necessary to secure compliance through
the pressure of public opinion or by leading the parties themselves
to believe in the fairness of the decision.
8o4 TRADE UNIONISM AND LABOR PROBLEMS
Labor's attitude toward any limitation of the right to strike is
well-known. Strikes are opportunistic and are looked upon as born
of necessity. If the right to strike or to strike at an opportune time
is taken away, then labor must be assured that its just demands will
be met in some other way. Labor is not ready, however, to leave
wages and working conditions entirely in the hands of government
boards of arbitration. Although not opposed to compulsory inves-
tigation, labor objects to the provisions in the Canadian act that
restrict the right to strike. There is some justification for this atti-
tude. The absence of any well-defined and acceptable standards to
be used in wage determination has forced arbitrators to resort in
many cases to the expediency of "splitting the difference" or of
giving the parties what they are most likely to accept without a
strike or a lockout. As a consequence the workers feel that they are
confronted with the same proposition in arbitration as in direct
negotiations with their employers and must not only "ask enough
to make it worth while to arbitrate" but perhaps in the end rely
upon their own strength. The dissatisfaction with arbitration is
always aggravated by delays in securing decisions or compliance
therewith, during which time the employer can prepare for a strike
and much of the effectiveness of precipitate action is lost. Thus
while some of the illegal strikes in Canadian industries have un-
doubtedly been due to ignorance or carelessness, the greater number
have occurred because the workers felt that an opportune strike
was the most effective way of securing their demands.
A restriction upon the right to strike or lock out pending an in-
vestigation by a government board as provided in the Canadian act
is generally favored by employers because it enables them to con-
tinue operation and to prepare for the possible contingency of a strike
and does not force them to accept the findings of such a board. If
the form of such legislation is changed to a compulsory acceptance of
findings, employers are as apt as employees to take exception to
adverse decisions. Employers are seldom violators of the Canadian
act in the sense of declaring an illegal lockout. For that matter a
lockout at any time is exceedingly rare. But it should be borne in
mind that the distinction between a strike and a lockout is not clear-
cut. By a refusal to meet demands or to accept the findings of a
legally constituted government board the employer may impose
THE INVESTIGATION ACT IN CANADA 805
conditions which, though resulting in a strike, nevertheless consti-
tute a lockout as effectually as though the doors of his establish-
ment were closed against his employees.
In any antistrike or lockout legislation it is necessary with both
employers and employees to meet the objection to what is regarded as
a curtailment of rights and privileges. Employers have the advan-
tage in that they have been subject to a greater amount of govern-
mental regulation than have workers. But if either employers or
employeeg are to be brought to the point of voluntarily accepting
arbitration as a substitute for direct action, there must be some
assurance that the underlying principle of arbitration is not merely a
restatement of the law of supply and demand, which in the final
analysis concedes the demands of the stronger party.
Much has been written of the emphasis placed upon public opinion
in averting strikes and lockouts and in bringing about compliance
with decisions. Because of the provision in the Canadian act that
the proceedings and findings of boards of conciliation and investiga-
tion shall be made public, the act has been jestingly called the
"parade law." There is much to be said, however, in favor of an
enlightened public opinion in dealing with industrial disputes. The
contending parties are much more apt to be temperate in their
attitude if they know that the public is to be kept informed about
the dispute. This in itself will tend to avoid precipitate action
and unreasonable demands and, irrespective of their relative strength,
will incline the parties toward the acceptance of a compromise that
approaches a fair settlement. In the absence of practical means of
government enforcement public opinion will go a long way toward
making restrictive legislation effective. That the public has viewed
repeated violations of the restrictive provisions of the Canadian act
with little concern, however, discredits the conclusion that those who
observe the provisions do so because they fear the public will condemn
infringements per se. Public interest is most keen when inconven-
ience is threatened or occasioned, and it is unlikely that a public
would view complacently a strike or lockout, whether legal or illegal,
that proved to be an actual menace to any large number of people.
In the administration of the Canadian act emphasis has been
placed upon conciliation and mediation rather than upon compulsion.
The Department of Labor endeavors to keep in touch with industrial
8o6 TRADE UNIONISM AND LABOR PROBLEMS
controversies, to warn disputants of the penalties provided for illegal
strikes and lockouts, and to encourage a continuance or a resump-
tion of negotiations or an application for reference under the act.
No one, it may be observed, is specifically charged with enforcing
the restrictive provisions, and it rests with the parties themselves
or with the public to prefer charges.
With reference to violations of the restrictive provisions the
Deputy Minister of Labor has previously been quoted as saying that
"It has not been the policy of the successive ministers under whose
authority the statute has been administered to undertake the enforce-
ment of these provisions."^ In his opinion, "The usefulness of the
act is better determined, in any event, less by the negative results
in situations where the parties have, regardless of consequences,
stayed deliberately aloof from its influences and operation than by
the positive results obtained in situations where the parties con-
cerned have, whether cordially or reluctantly, brought their differ-
ences within the scope of the act.""
It may be expected that either party to a dispute will be quick
to avail itself of the act if it does not feel strong enough to make
certain the success of direct action. It may be repeated, too, that
the act is most apt to be invoked in disputes in those industries
where collective bargaining has become an established fact. A
mutual agreement either to arbitrate or to negotiate implies that
each party to the dispute has a respect for the strength of the other.
But if either side feels itself in a more strategic position than the
other, or if the issues involved are not those with which the public
is generally sympathetic, the restrictive provisions will be of little
value unless some attempt is made to impose the penalties provided
for violation. Moreover, repeated violations of these provisions
must inevitably reflect upon their enforceability and foster such a
disregard for the act as to lessen its usefulness even as a concilia-
tory measure.
B. M. Squires
United States Department op Labor
iP. 782.
^Labor Gazette, Canadian Department of Labor, April, 1916, p. 1118.
XLV
EIGHT-HOUR SHIFTS BY FEDERAL LEGISLATION^
THERE is one thing that separates continuous industries from
all other industries and gives them a distinct classification and
a peculiar claim for legislation. In a continuous process there can
be no gradual reduction in hours of labor. Employees must work
either two shifts of twelve hours or three shifts of eight hours.
There is no middle ground. It is impossible to reduce the hours
gradually, say, from twelve to eleven, then to ten, then to eight, but
they must be reduced abruptly from twelve to eight.
This sudden change in length of the day's work requires that
these industries be treated in a class by themselves and not confused
with other industries. Arguments which hold good for a gradual
reduction of hours may have little or no place in an industrial proc-
ess which can be improved only by an almost revolutionary reduc-
tion of hours.
First, for instance, there is the argument of increased efficiency
of labor when working shorter hours. No amount of investigation
whatever can give to this argument any greater weight than it has
without investigation. We know by mere ai-ithmetic that to reduce
hours from twelve to eight means a reduction of 33 J^ per cent in
hours, and that in order to produce as much in eight hours as in
twelve efficiency must be increased 50 per cent.
Furthermore, since these industries often work their employees
seven days a week, or a limit of eighty-four hours a week, we know
that a reduction from eighty-four to forty-eight hours a week is a
reduction of 43 per cent in hours and that for a man to produce
as much in a week of forty-eight hours as in a week of eighty-four
hours would require an increased efficiency of about 75 per cent.
No amount of investigation can conclusively show in all continuous
industries that a man's efficiency can be increased 50 to 75 per cent
1 from American Labor Legislation Review, Vol. VII (1917). PP- 139-154-
80^
8o8 TRADE UNIONISM AND LABOR PROBLEMS
by merely reducing his hours of labor 30 to 43 per cent. It may,
perhaps, be shown in some industries ; and there is reason to believe
that in the manufacture of paper, which is now largely on the
three-shift system, the men are turning out as much paper in eight
hours as they formerly did in twelve hours. In this process the
amount of output seems to turn upon the watchfulness and close
attention which the machine tender is able to devote to the huge
machine that pours out miles of paper when running correctly or
balls up rubbish when it gets out of order. The machine might run
smoothly for several hours and the man might sleep or doze, but
experience seems to show that an eight-hour day without fatigue
is about equal to a twelve-hour day half asleep the last four hours.
This seems to be borne out by the fact that twelve-hour mills and
eight-hour mills have been and still are competing with each other.
Yet even in this case the evidence is not conclusive, for the wages
per day on some positions may have been reduced when the change
was made and the low cost of labor to the employer on the eight-
hour system may have been secured partly by the lower wages per
day and partly by the larger output. In other industries, such as
iron and steel, the work is already speeded up to the capacity of the
equipment, and a reduction of hours from twelve to eight cannot be
shown to increase the efficiency of the worker the necessary 50 per
cent to offset the reduction.
We have, indeed, the report of a small company operating three
open-hearth furnaces to the effect that the higher efficiency of the
eight-hour system brought about a slight decrease in the cost of
production. This was owing in part to greater economy of raw
material used, such as pig iron and fuel oil, and partly to improved
quality of the castings. But the lower cost of production was owing
also to the fact that the hourly rate of pay was increased only about
20 per cent.^ Had the hourly rate been increased 50 per cent, in
order that the men might earn as much in eight hours as they had
earned in twelve hours, the cost of production would have been
increased some 25 per cent.
But there is another circumstance that tends to increase the cost
of production if the eight-hour system is to be required by law.
1 Commonwealth Steel Company, address of superintendent before Foundry-
men's Association, 1912.
EIGHT-HOUR SHIFTS 809
Manufacturers who oppose the reduction say that they cannot get
enough workmen on the eight-hour basis, and that the workmen
prefer to work twelve hours ; therefore the twelve-hour competitors
get all the workmen needed, while the eight-hour shops are short
of men.
The evident answer to this objection is that workmen, of course,
prefer twelve hours when they can make more money than they
can in eight hours. The reason why manufacturers cannot get
enough workmen on the eight-hour basis is that they do not pay as
much wages for eight hours as their competitors pay for twelve hours.
Of course, no matter how high the wages, there are always men who
are willing to work overtime for more money.
One of the reasons given for overtime is that in a continuous
process a man on one shift cannot leave his work until the man
for the next shift shows up. This is evident, and the only way it can
be met and overtime prevented is to have enough spare hands em-
ployed to jump in and fill the gaps when the regular men fail to
come around.
An essential thing, therefore, in any eight-hour law is the pro-
hibition of overtime. No exceptions whatever should be allowed
except, perhaps, in case of accident, and these exceptions should be
strictly limited under rules and regulations carefully laid down by a
board created for the purpose. In no other way can it be provided
that the manufacturer will employ enough spare hands to take care
of emergencies.
But to have spare hands costs more money. They must be paid
even when not working, or when working at less important jobs, in
order to be on hand when needed.
Another reason for increased cost of the eight-hour system when
imposed by law is in the matter of administration, getting evidence
of violations and enforcing penalties for overtime. In order to make
the law enforceable the eight-hour system cannot be limited merely
to continuous processes, but must extend to all occupations in the
same establishment. It would be almost impossible to get evidence
of violations if a man on an eight-hour job could be transferred to
other work when he finishes his eight-hour task. All jobs in the
same establishment must be reduced to eight hours in order to
enforce the eight-hour limit on the continuous jobs.
8 10 TRADE UNIONISM AND LABOR PROBLEMS
Consequently, there are at least three points where the eight-
hour system, if enforced by law, will cost the employer more than
the twelve-hour system. He must pay as much for eight hours as
other employers are paying for twelve hours in order to get enough
supply of labor. He must employ and pay spare hands in order to
avoid overtime for regular hands. And the eight-hour system must
include all employees in the shop in order to prevent evasion.
So much for the alleged increase in efficiency of labor to be ex-
pected from a reduction in hours. It must be conceded that efficiency
will not be increased enough to offset the decrease in hours from
twelve to eight.
Second, there is the argument for improved health of the worker
when working shorter hours. This argument also is inconclusive in
continuous industries. Under the decision of the United States Su-
preme Court the bakery business is not so unhealthful as to make a
legislative ten-hour day constitutional,^ although an eight-hour day
by law is constitutional in smelting and underground mines.^ It
seems to be the theory of the Court, as it is also the theory of those
who oppose the universal eight-hour day, that industries can be
classified according to the probable injury which they inflict upon
the worker, and that the hours of labor can correspondingly be
adjusted so as to counteract this damage. It follows that in light
and easy occupations the reasonable hours of labor might be ten,
twelve, or even more per day, but in the heavy and exhausting
occupations they might constitutionally be reduced to eight or even
less per. day.
But in the continuous industries this nice theory of compensation
does not work. It might undoubtedly be shown that eight hours is
all a man can stand when operating a Bessemer converter, but it
can plausibly be shown that he can stand ten, twelve, or thirteen
hours as a machine tender in a paper mill, or a heater in a steel
mill, where he has very little manual work and merely has to wait
and watch while the machine does the work. If the health argu-
ment alone is depended upon, the reduction of hours in continuous
industries could be brought about under the decisions of the courts
only in a few occupations where it can be shown that more than
^Lochner v. New York, 198 U.S. 45, 25 Sup. Ct. 539 ^1905).
^Holden v. Hardy, 169 U.S. 366, 18 Sup. Ct. 383 (1898).
EIGHT-HOUR SHIFTS 8ii
eight hours is excessive. But in many occupations in the same
industry, from the standpoint of health alone, nine, ten, and even
eleven hours cannot be shown to be excessive.
Consequently, when the question of constitutionality of an eight-
hour law for continuous industries comes before the court, other
arguments besides the health argument must be allowed a place, or
the legislation will fall under the judicial veto.
These additional arguments may be summed up under the head of
citizenship.
The peculiar fact about a continuous industry, compared with
a noncontinuous, is its enormous increase in the production of
wealth at an astounding decrease in cost. This is on account of the
huge investment in fixed capital, so that the machine, more than
the man, is the great producer. The man only watches, guides, and
repairs the machine. The machine even feeds itself and unloads
itself, and the man only touches buttons and handles levers. The
fixed charges for interest and depreciation on these great invest-
ments might, in some cases, actually exceed the wages of the
workers if the machines were operated only eight or ten hours a
day. But operated continuously day and night seven days a week,
these fixed charges go down in comparison with wages and output —
in other words, the production of wealth is increased enormously
in comparison with the cost of production.
To whom, then, shall this increased production go? Shall it go
in part to the wage-earner in decreased hours without reduction in
wages, or shall it go to the consumer in reduction in prices? The
steel industry shows us where it goes. Before the Homestead strike
of 1892 the hours of labor were nine, ten, eleven, or twelve, accord-
ing to the time the man required to finish his task. Two shifts were
all that could be used, and the equipment was idle as much as four
to six hours or more out of the twenty-four, besides the expense of
stopping and starting. The union of iron and steel workers foolishly
opposed the eight-hour continuous system, against the protests of
their own leaders, and consequently the union was smashed. After
the loss of the strike and the expulsion of unionism the continuous
system was introduced or extended. With it came not eight hours
in three shifts but twelve hours in two shifts, wherever by any in-
genuity the men could be forced to stand the physical strain of more
8i2 TRADE UNIONISM AND LABOR PROBLEMS
than eight hours. The story has been told by Fitch in his book on
the steel workers. It is not merely the health of the employees that
is affected, for the industry has imported or used the sturdy peasants
and farm laborers of Europe. But it is the homes, the wife and
children, the schools and libraries, the churches, the politics — in
short, the citizenship, that has suffered.
We might, perhaps, all agree that a man could work comfortably
and healthfully nine or ten hours in the steel industry, but that is not
the question. The question is not Are ten hours excessive ? but Are
twelve hours excessive ? If we agree that twelve hours are excessive,
then we must agree that eight hours are the only reasonable hours in
that industry. There is no other alternative. And we cannot agree
that twelve hours are excessive in all processes if we base the argu-
ment solely on health. But we can all agree that twelve hours are
excessive if the worker is to enjoy the privileges and observe the
duties of home, family, and citizenship. Indeed, the citizenship
argument cannot be separated from the health argument. The
health argument would apply to animals and slaves as much as to
men ; the citizenship argument applies to workmen because they
are present and prospective citizens of the republic.
The foregoing considerations make it evident that eight hours in
continuous industries cannot be brought about by state legislation.
Not only will the increased cost put any state at a disadvantage as
against competing states but it cannot be shown that simply as a
health measure a limit of eight hours is necessary for adult males.
Only federal legislation will equalize competition and permit the
argument for improved citizenship to have equal weight with that
for improved health. Consequently it is proposed to apply the law^
only to those industries engaged in interstate and foreign commerce
and to enact the law through the federal Congress and not the state
legislatures. The proposed law does not apply to local municipal
utilities, like gas, water, or street cars, nor to railways and other
national utilities. It applies only to industries that are subject to
interstate and foreign competition.
In the hearings before the Massachusetts Commission of 1916
assigned to investigate this subject, certain paper manufacturers,
while opposing state legislation, conceded that their objections would
iFor tentative draft of proposed bill see page 821,
EIGHT-HOUR SHIFTS 813
not hold against federal legislation. And this for two reasons : federal
legislation would place them on an equality with competitors in other
states, and the federal tariff could protect them against foreign
competition.
Whatever may be said about interstate competition in those in-
dustries where a gradual reduction of hours is possible, or where the
reduction is only from nine or ten hours to eight hours, it cannot
be shown that any state can afford to take the lead in reducing hours
abruptly from twelve to eight. Manufacturers in one state might
work eight hours in competition with others working nine or ten
hours, but they cannot generally compete with those working twelve
hours. And, since there is no middle ground, it is only by federal
legislation that continuous industries may be brought to the eight-
hour basis.
On the other hand, it may now be accepted that the policy of a
protective tariff is approved by both political parties to the extent,
at least, of the difference in the labor cost of production in this
and in competing foreign countries. Even the traditional free-trade
party, when it recently came into power, restored the Tariff Commis-
sion, whose most important duty is this very problem of ascertaining
how high the tariff duties should be placed in order to ward off foreign
competition. It may be accepted, then, that for the future no tariff
schedules will be reduced so low that an American industry on the
eight-hour basis will not be able to compete, at least in the home
market, with foreigners on a twelve-hour basis. There will undoubt-
edly be differences of opinion as to the exact rate of duty necessary
for this protection. It cannot be expected that even the most expert
tariff commission can figure out that rate exactly. It can only deter-
mine the upper and lower limits of the necessary protection — the
upper limit of excessive protection, the lower limit that ceases to
protect.
But with the policy of protection itself accepted, the matter of
finding the exact rate for any particular industry is a detail that
does not now concern us. The important thing is that the protec-
tive policy has now settled down where it genuinely accepts the argu-
ment which its advocates have insisted upon for the past eighty
years — ^protection to American labor against cheap foreign labor.
The weakness of this argument has always been that the federal
8i4 TRADE UNIONISM AND LABOR PROBLEMS
Congress has never undertaken to be consistent ; it has never under-
taken to provide that the protected workman should actually get the
protection. It has left that matter to be settled either by unions and
strikes or by the good will of manufacturers.
How far these two methods have succeeded we can readily ascer-
tain. In the steel industry the unions have been almost completely
destroyed, and there is no indication in sight that laborers in that
business will ever again be able to establish an organization that
can deal with the manufacturers on equal terms. In the paper
industry it was largely through the energy of the unions in the
Eastern states that the eight-hour day was established in the face
of the twelve-hour day in the Western states where the unions had
been destroyed. But these very unions of paper workers are the
most insistent of all advocates of eight-hour legislation to protect
them in the gains they have already secured. Local unions of paper
workers in Massachusetts sent their representatives to be heard by
the state commission on the subject and strongly appealed for state
legislation in opposition to the arguments of their employers. The
unions there are confronted by the fact that about lo per cent of
the paper mills remain on the twelve-hour system ; and, further, they
naturally infer, when their own employers, who have already ac-
cepted the eight-hour day, nevertheless oppose legislation requiring
their twelve-hour competitors to come down to the same basis, that
these employers intend to go back to twelve hours if they can do so
at a good opportunity in the future. They are not willing to trust
the good will of their employers.
That the good will of manufacturers cannot be depended upon
to pass over to their employees the benefits of protection is also
abundantly shown in the steel industry. In that industry the smaller
competitors must follow the lead of the great corporation that sets
the standards, or else be put out of business. Yet when, a few years
ago, the United States Steel Corporation took a vote of its stock-
holders on the eight-hour day, after an exciting campaign conducted
by a few of them inside the organization, the majority of the stock-
holders voted against it and the plan was dropped. Even on the
much less expensive project of one day of rest in seven the same cor-
poration has already abandoned its former humanitarian policy. No
more impressive lesson of the futility of depending on the good will
EIGHT-HOUR SHIFTS 8iS
of even the most prosperous of the tariff beneficiaries can be offered
than the testimony of its competitor, the Lackawanna Steel Com-
pany, in its petition for exemption from the one-day-rest law of New
York. In its petition, offered during the present year, the Lacka-
wanna Company says (p. 3 1 ) :
We are advised that the chairman of the United States Steel Cor-
poration several years ago, while labor conditions were entirely dif-
ferent from those obtaining at the present time, gave instructions
quite peremptory in character to all the subsidiaries of that company
requiring them to follow out the one-day-of-rest principle and
warning them that any deviation from the published instructions
would result in dismissal from office. We have, therefore, directed
our investigations to these subsidiaries and state, without fear of
successful contradiction, that the Corporation is now disregarding
the one-day-of-rest-in-seven principle which it so strongly advocated
several years ago and which it in the past, in good faith, earnestly
strove to put into practice. It too has felt the shortage of men and
owing to the great and pressing demand for its product no longer
observes the practice which its chairman promulgated. Having taken
so firm a position, it is not strange that it is difficult to get heads of
subsidiaries to admit that the published rule has become a dead
letter. When labor conditions become normal the Corporation will
doubtless return to an observance of the rule. So far as we can
ascertain, the rule was only observed by the Corporation during the
years when the employees of this company had far more time off
than the one-day-of-rest statute requires.
The Lackawanna Company then offers to produce affidavits sup-
porting these statements.
Other instances might be given, but they are not now necessary.
We are forced to conclude that in manufacturing industries with
continuous processes neither unionism nor good will can secure the
eight-hour day. Only federal legislation can overcome the valid ob-
jections of interstate competition and protection of the home market.
Another objection that has influence is the one that American
manufacturers will be unable to sell their products in foreign mar-
kets in competition with foreigners. Granted that we can protect
the home market, they say we cannot capture the foreign market.
Two considerations must be taken into account in meeting this ob-
jection. In the first place, it is a question of public policy whether
the American nation shall sacrifice its wage-earners in order to
8i6 TRADE UNIONISM AND LABOR PROBLEMS
enable its manufacturers to compete in foreign markets. This ques-
tion of policy must be settled before we can consider any other ob-
jections to a reduction of hours from twelve to eight. We hold that
if foreign markets cannot be captured unless laborers are forced to
work twelve hours in continuous industries, then they are not worth
capturing. Our 100,000,000 population furnishes the greatest home
market in the world. If we are willing to tax ourselves in order to
protect American labor in this bountiful home market, it is prepos-
terous to ask us to give up this very protection, which is the main
object of our tariff, just because we want to drive foreigners out of
foreign markets.
Again, we very well know another penalty which we must pay
if we push American manufactures too hard into foreign markets.
The penalty is a huge navy and military preparedness in order to
keep other manufacturing nations, like Germany and Japan, from
driving us out of neutral markets like China and South America.
We can protect our home market by a tariff ; we can capture and
hold the foreign market only by an army and navy. Furthermore,
twelve-hour labor in these continuous industries will need a bigger
navy and army than eight-hour labor, because it will enable our
manufacturers more easily to undersell foreigners and so will more
surely aggravate them into threatening us with their own armies
and navies.
Again, from this very standpoint of military preparedness it needs
no argument to show that laborers who work twelve hours continu-
ously can never be equally fit for enlistment in time of war compared
with those who work only eight hours. The twelve-hour system is
suicidal, even for the purpose of capturing foreign markets. It stirs
up foreign competitors to greater military preparation against us and,
at the same time, breaks down the health and strength of the very
working people who must be called upon to protect and defend that
foreign market.
But it does not follow that foreign countries will always adhere
to the twelve-hour system. Even before the war Great Britain's
iron and steel industry had about completed the change to an eight-
hour system. The International Association for Labor legislation,
in 1912, initiated the movement for treaties on this subject among
competing nations. This movement was interrupted by the war, but
EIGHT-HOUR SHIFTS 817
that it is already bearing fruit is indicated by press dispatches from
Sweden (December 2, 1916) stating that Sweden, Norway, Den-
mark, and Russia have joined together in the investigation of the
wood-pulp industry preparatory to adopting the three-shift system.
The action of the American section, in bringing forward at this time
a bill for federal legislation, is in line with this movement initiated
in 1912 by the International Association. But the United States
government does not enter into treaties of this kind, and our
protective-tariff system and enormous home market make it unneces-
sary to wait and see what other countries will do after the war.
Another reason why manufacturers oppose this legislation is their
dread that the introduction of the eight-hour system by law in the
continuous processes will be an entering wedge for introducing it in
other processes and industries.
Of course, federal legislation for eight hours in continuous proc-
esses may possibly suggest similar laws for noncontinuous processes.
Nobody can promise that the agitation will stop at the continuous
process. But noncontinuous industries stand on a different footing.
In them the hours can be gradually reduced and federal legislation
is not required. If, however, the fear of other laws not now needed
is allowed to prevent the enactment of a law urgently needed, then,
of course, all progressive legislation on any subject can be prevented.
The fear of further legislation has always stood in the way of needed
legislation. It is only by going ahead in spite of this fear that any
progress can be made and any particular law can be discussed on
its merits.
It may be that it is this dread of further legislation that prevents
employers who privately favor this law from publicly supporting it.
But there seems to be another reason. In the Massachusetts hearings
even the paper manufacturers who already have the eight-hour day
in competition with others on the twelve-hour day nevertheless, with
one exception, opposed state legislation requiring their competitors
to adopt it. Their objection is incomprehensible from the standpoint
of self-interest. It can be explained only from the standpoint of
class interest. They oppose a law which would benefit themselves
individually because they stand by other employers who would not
be benefited by it. If this class interest of employers is so great as
to outweigh self-interest, surely such employers cannot raise the
8i8 TRADE UNIONISM AND LABOR PROBLEMS
objection to this law that it is class legislation. If they suppress their
private opinions in the interest of their. class opinions, they have
already disqualified themselves from objecting to legislation that
treats them as a class.
The bill, in tentative form, is limited to the iron and steel and
the paper industries. It is in these two industries that governmental
investigations have. already been made^ which warrant legislation at
this time. But the administrative board created by the bill is directed
to investigate other continuous industries of interstate commerce and
to recommend to Congress the extension of the act wherever it is
practicable and desirable to establish the three-shift system.
The enforcement of the law follows the model set by the child-
labor law of 1916.^ The Attorney General, the Secretary of Com-
merce, and the Secretary of Labor constitute a board with power
to make rules and regulations. The Secretary of Labor and the fed-
eral district attorneys inspect and prosecute. The law comes under
the power of Congress to regulate interstate commerce.
In order that manufacturers may have time to work out their own
methods of obeying the law, the date of taking effect is set ahead
three years^ but the board is authorized to promulgate rules at an
earlier date. In this way it is possible for employers to take advan-
tage of any falling off in business and to introduce the three-shift
system at a time when it will offset unemployment.
1 shall not stop to discuss at length the constitutional question.
The decisions of the courts are familiar. Some decisions support
this proposed legislation, others run counter to it. It seems to
violate some of the abstract principles of individual liberty. It takes
away from the employer certain property rights and transfers them to
his employees ; it compels him to employ more laborers than he would
if he ran his business in his own way ; it takes away the liberty of
the worker by prohibiting him from earning more money by working
overtime; and, worst of all, this worker, who is being paid more
money for less liberty, is a grown-up man— not a child nor a woman.
It may be admitted that these constitutional objections would
have weight if the thing were left to state legislation. A state
iBy the Tariff Board and the Bureau of Labor Statistics.
2 Overthrown by the Supreme Court but reenacted under the taxing power
of United States statutes.
EIGHT-HOUR SHIFTS 819
upreme court is confronted by the fact that the state legislature
annot protect employers by means of a tariff. Although, technically
n law, this may not make a difference provided it can be shown that
lublic interest is subserved, yet practically an increase of 2 5 per cent
o 50 per cent in labor cost would lead the court suspiciously to
crutinize whether the public interest really requires so great a sacri-
ice on the part of employers. It is different in federal legislation,
'here a protective tariff offsets the sacrifice. The tariff already inter-
eres with liberty, and manufacturers, who profit by this interference,
annot with good grace object to further federal interference.
The case is somewhat different with the objections raised by promi-
lent leaders of organized labor. They oppose legislation regulating
LOurs of labor of adult male workers not because it deprives the in-
lividual of his empty liberty to work overtime but because it is a
ubstitute for that collective liberty which the unions have acquired
hrough the Clayton Act. They rightly fear the doing by legislation
i^hat the law permits them to do by strikes and boycotts, because
hey fear anything that invites the courts to take part in the struggle
f organized capital and organized labor. Their experience, likewise,
las shown them too often that labor laws are a dead letter, and that
ven with a law on the statute book it sometimes requires a strike
r the threat of a strike to get it enforced according to its intent.
Naturally, to them their trade union is more important than a law
?hich takes its place.
These objections should be seriously considered, but it is submitted
lat a federal eight-hour law for continuous industries stands on a dif-
;rent footing from state legislation for noncontinuous industries. One
f the reasons why state laws are not strictly enforced is this very fact
f the necessity of meeting interstate competition. But a federal law,
pplied equally everywhere, furnishes much less inducement to viola-
!on than a state law which forces on the employer the option of either
iolating it or giving up his business to competitors in other states.
Furthermore, in the steel industry, for example, with its vigorous
ntiunion policy, it is difficult to see how a union can ever secure such
footing that it can compel this powerful corporation to come down
bruptly from twelve hours to eight hours. The same is true of other
ontinuous industries, such as sugar refining, where the bulk of the
usiness is controlled by a trust. On the other hand, in the paper
82 o TRADE UNIONISM AND LABOR PROBLEMS
industry it is the fairly well-organized unions of Massachusetts which
are the most insistent advocates of eight-hour legislation and which
have sent their leaders and members to press the matter before the
state legislative committee.
In general, it is quite evident that the trade-union opposition to
eight-hour legislation does not extend to all unions nor to all of the
rank and file, and this opposition is likely to disappear when unions
seriously attempt the stupendous task of reducing hours from twelve
to eight in the continuous industries.
In fact the field of unionism is not materially lessened by the pro-
posed law, and on this point it doubtless will be considered by some
persons a fatal defect that the bill does not propose to prohibit a re-
duction in wages when it requires a reduction in hours. The reasons
underlying this limitation are partly economic, partly administrative,
and partly political. From the economic standpoint experience has
shown that if overtime is prohibited both the increased demand for
labor and the standard of life of the laborers may be expected to bring
the wages for eight hours up to the former level of twelve hours. How-
ever, this can scarcely occur at once, and it is more likely to occur
if a labor union must be taken into account by the employer.
From the administrative standpoint it is not proposed to regulate
wages by law on account of the difficulty of getting evidence of viola-
tions. The wide differences in wages of individuals and classes and
the fact that the individual worker would be required to testify
against his employer make the enforcement of a wage law the most
difficult of all labor laws. But the eight-hour day, if uniform for
all labor in the same establishment, can, by the device of requiring
the names and hours of each employee to be posted, be made to fur-
nish to the factory inspector its own evidence of violation.
From the political standpoint the regulation of wages for all classes
of labor must eventually lead to compulsory arbitration and its pro-
hibition of strikes — a strain on our political institutions which we
are not prepared to meet. But regulation of hours of labor in con-
tinuous industries does not introduce a new and radical policy ; it is
only the extension of a policy already recognized and successfully en-
forced through state and federal legislation.
John R. Commons
Uniyersity of Wisconsin
EIGHT-HOUR SHIFTS 821
TENTATIVE DRAFT OF A BILL^
To regulate interstate and foreign commerce in products of continu-
ous industries.
Sect. i. That no producer, manufacturer, or dealer shall ship
or deliver for shipment in interstate or foreign commerce any article
or commodity the product of any mill or manufacturing establishment
situated in the United States and engaged in
(a) the production of pig or molten iron, or steel ingots by what-
ever process made,
(b) the rolling of steel or iron by any hot process,
(c) the refining of iron by any hot process, or
{d) the production of mechanical wood pulp, sulphite or sulphate
pulp, newsprint, book or other paper, cardboard or other
manufactures of pulp,
in which within thirty days prior to the time of the removal of such
product therefrom any person engaged in mechanical or manual labor
has been employed or permitted to work more than eight hours
in any day or more than six days in any week.
Sect. 2. That the manager, superintendent, or foreman of any
such mill or manufacturing establishment shall when and as required
by the board post in the mill or manufacturing establishment a notice
on a printed form furnished by the board, stating the name of every
person employed therein and for every such person the hours of work
required on each day of the week, the hours of beginning and quitting
work, and the period allowed for meals. The presence of any such
person in the mill or manufacturing establishment at a time not
included in the hours of work of such person as stated in such notice
shall constitute prima facie evidence that such person was then em-
ployed or permitted to work contrary to the standards prescribed by
Section i of this act.
Sect. 3. That the Attorney General, the Secretary of Commerce,
and the Secretary of Labor shall constitute a board, herein referred
to as the board, to make and publish from time to time uniform rules
and regulations for carrying out the provisions of this act. The
Secretary of Labor shall investigate and report to the board the
conduct and operation of mines, quarries, mills, and manufacturing
establishments situated in the United States which are operated both
day and night on at least thirty calendar days in the year, and shall
ascertain when it is practicable and desirable to establish the three-
shift system for carrying on work in such mines, quarries, mills, or
manufacturing establishments. The board shall make an annual
iln view of the decision on the child-labor law this bill should probably be
drawn under the taxing power.
82 2 TRADE UNIONISM AND LABOR PROBLEMS
report to Congress of its findings and its recommendations with
respect to the extension of this act to the products of industries other
than those specified in Section i.
Sect. 4. That for the purpose of securing proper enforcement of
this act the Secretary of Labor, or any person duly authorized by
him, shall have authority to enter and inspect at any time mills and
manufacturing estabHshments and other places in which goods are
produced or held for interstate or foreign commerce ; and the Secre-
tary of Labor shall have authority to employ such assistance for the
purposes of this act as may from time to time be authorized by
appropriation or other law.
Sect. 5. That it shall be the duty of each district attorney to
whom the Secretary of Labor reports any violation of this act, or to
whom any state factory inspector or commissioner of labor, state
medical inspector, or any other person presents satisfactory evidence
of any such violation, to cause appropriate proceedings to be com-
menced and prosecuted in the proper courts of the United States
without delay for the enforcement of the penalties in such cases
herein provided.
Sect. 6. That any person who violates any of the provisions of
Sections i or 2 of this act, or who refuses or obstructs entry or
inspection authorized by Section 4 of this act, shall for each offense
prior to the first conviction of such person under the provisions of
this act be punished by a fine of not more than $200, and shall for
each offense subsequent to such conviction be punished by a fine of
not more than $1000 nor less than $100, or by imprisonment for
not more than three months, or by both such fine and imprisonment,
in the discretion of the court: Provided, That no dealer shall be
prosecuted under the provisions of this act who establishes a guaranty
issued by the producer or manufacturer, resident in the United States,
to the effect that the goods shipped, delivered for shipment, or trans-
ported, were produced or manufactured in a mill or manufacturing
establishment specified in Section i in which within thirty days
prior to the removal of such goods therefrom no person engaged in
mechanical or manual labor was employed or permitted to work more
than eight hours in any day or more than six days in any week ;
and in such event, if the guaranty contains any false statement of a
material fact the guarantor shall be amenable to prosecution and to
the fine or imprisonment provided herein for violation of the provi-
sions of Section i of this act.
Sect. 7. That the word "person" as used in this act shall be
construed to include any individual or corporation or the members
of any partnership or other unincorporated association. The term
"ship or deliver for shipment in interstate or foreign commerce" as
used in this act means to transport or to ship or deliver for shipment
EIGHT-HOUR SHIFTS 823
from any state or territory or the District of Columbia to or through
any other state or territory or the District of Columbia or to any
foreign country ; and in the case of a dealer means only to transport
or to ship or deliver for shipment from the state, territory, or Dis-
trict of manufacture or production. The term " three-shift system for
carrying on work " means that three shifts or relays of workers are
used, whether the shifts or relays are changed at intervals of eight
hours or less.
Sect. 8. That this act shall take effect January i, 1920, except
as to Section 3, which shall take effect January i, 19 19.
INDEX OF LEGAL CASES CITED
Adair v. United States, S79, 621, 635
AUgeyer v. Louisiana, 60S
Atkin V. Kansas, 612
Atkin V. United States, 615
Atkins V. Grey £agie CoaZ Co., 632
Baltimore & Ohio R. R. v. Interstate
Commerce Commission, 619, 627
Bey man v. Cleveland, 611
Borgnis et al. v. foife Co., 21
Bosley v. McLaughlin, 617, 626, 630
Braceville Coal Co. v. People, 589,
600, 611
Brannigan v. Union Min. Co., S92
Burcher v. People, 616
Butchers' Union Co. v. Crescent City
Co., S91, S9S ■
Colder v. 5«K, S91
Coffeyville Vitrified Brick & Tile Co.
V. Perry, 603
Commonwealth v. Boston & M.R.R.,
629, 630
Commonwealth v. Hamilton Mfg. Co.,
611, 615
Commonwealth v. Isenberg, 602
Commonwealth v. McKay, 66g
Commonwealth W.Perry, S91, S98, 623,
631
Coppage V. Kansas, 621, 63S
Dayton Coal & Iron Co. v. Barton,
612
iJeni V. Pennsylvania Co., 592
Dugger V. Insurance Co., 611
■Durkin v. Coo^ Co., S92
£agie Gtoi owi Manufacturing Com-
pany V. Rowe, 664
£aW 0/ Chesterfield v. Janssen, 609
£j; Parte Boyce, 6ig
£a: Parte if air, 611, 619
£:c Parte Kuback, 597, 598
Fairlee v. Herring, 592
Fletcher v. Pec*, S9i
Prorer v. Peo/iZe, 588, S89> 592, S93.
S98, 601
825
Gillespie v. People, 603
Godckarles v. Wigeman, 580, 589, S96,
S97> S98, 600, 601, 602, 612
Grossman v. Cawinez, 592
Hadacheck v. Sebastian, 631, 633
Hancock v. Yaden, 612
Harbison v. Knoxville Iron Co., 612
Harding v. People, S93, 602
Hawkins v. Bleakley, 21
Hawley v. Wa/feer, 617, 626
.ffciw V. McCall, 615
> Hitchman Coal and Coke Company
V. Mitchell et al., 63s, 652
Holden v. Hardy, 611, 618, 621, 624,
810
ffoia V. WeWon, 608
Hoxie V. iVeiti Fori, iVety Haven, and
Hartford R. R. Co., 40
7w re Boyce, 611, 619
7» re Broad, 612
Zn re House Bill, 599
/« re Morgan, 602, 618
International Text Bcok Co. v. IFeis-
singer, 612
Jarrah Timber etc. Corporation v,
Samuel,. 608
Johnson v. Goodyear Mining Co.,
602, 611
/o«e5 V. People, 596
JfOTg V. Barger, 669
Knoxville Coal & Iron Co. v. Harbi-
son, 612
iee^ V. Railway Co., S9i, 600, 611
ioa» Association v. Topeka, 591
Lochner v. A^eta For*, 590, 604, 620,
624, 630, 637, 810
iow V. i?ee5 Printing Co., 600, 620
McClure v. Raben, 609
McLean v. Arkansas, S99i 602, 6ii,
612, 627, 630
McLean v. 5fate, 600
McMillan v, Spider Lake etc. Co., 592
82 6 TRADE UNIONISM AND LABOR PROBLEMS
Mathews v. People, 604
Matter oj Jacobs, S96
Meng V. Coffey, S9S
Middleton v. Texas Power and Light
Co., 21
Miller v. Wilson, 617, 626, 630
Millet V. People, 597, 598, 600
Mountain Timber Co. v. Staie 0/
Wfli/singfoM, 21
Mugler V. Kansas, S93
Muller V. Oregon, 611, 616, 623, 625,
626
Munn V. Illinois, 609
National Founders' Association v.
Taplin Rice and Company, 426
iV. F. C. iJ.i?. Co., V. PTtee, 21
Noble State Bank v. Haskell, 21
Northern Pacific Railway Co. v.
Meese, 21
Opinion of Justices, 612
/"or^e Doiiii 6- Co. v. Mulford & Co.,
634
People V. Becfe, 589
People V. Coier, 585, 604
People V. Crane, 615
People V. Klinck Packing Co., 622,
628, 629
People V. Marcus, 603, 606
People V. Marx, 593, 596
People V. Schweinler Press, 617, 626,
627, 630, 633
People V. Strollo, 613
People V. Williams, 616, 617, 624,
627
P/fflKt V. H'oodi, 649
Price V. Illinois, 628, 629, 633
Railway Co. v. Chicago, 591
Railway Company v. PawZ, 611
i?awiey v. People, 599
i?e Ten ffowr ioui /or Street Railway
Corporations, 619
i?ice V. Noakes, 608
i?j7e3i V. Massachusetts, 617
Ritchie v. People 588, 591, 593, 600,
601, 603, 612, 615
Ritchie &■ Co. v. Waywiaw, 617, 626
Roberts v. Geeaf Northern R. Co.,
592
Schlemmer v. Buffalo R. & P. R. Co.,
592
5cofJ V. Sanford, S93
Shaffer v. Mining Co., 611
Shaver v. Pennsylvania Co., 602
Slaughter House Cases, 593, 603, 605
Spurgeon y. Collier, 608
Starnes v. Allison Mfg. Co., 611
5iate v. /4J^m, 612
Siote V. Barba, 622
5taie v. Brown & Sharpe Mfg. Co.,
611
5tofe V. Buchanan, 611, 616
Steie V. Bunting, 622, 628
5toie V. Cantwell, 619
5toie V. Pzj-e Creek Coal & Coke Co.,
588, 591, 592, S97
5iaJe v. Goodwill, 589, 592, 595, 597,
598, 609, 632
5«ate V. Z?a««, 588, 589, 591, 593, 603,
611
5ioie V. Julow, 601
5taie v. Kreutzberg, 603
5taie v. Lootnis, 591, 592, 600
5iate v. Lumber Co., 621
Siflte V. Miksicek, 621
5ioJe V. Missouri Tie & Timber Co.,
604, 611
5tote V. Muller, 611
5iote V. Pee/ Splint Coal Co., 611
Sfoie V. Shorey, 611
5iate V. Farreeji Electrical Supply Co.,
604
5ioie V. TFj/job, 611
Steenerson v. Greot Northern Ry., 634
Stettler v. O'Hara, 626
Sturges V. Beauchamp, 617
Sturges V. Crowninshield, 581
Taylour v. Rockford, 608
Thorpe v. Thorpe, 609
17. 5. V. Martin, 612
Vegalahn v. Guntner, 648
FecTCon v. Bethell, 597, 608
Wenham v. SJoie, 611, 61S
Wheeling Bridge & Terminal Co. v.
Gilmore, 600
Wilson V. iVero, 639
Wynhamer v, People, 593
INDEX OF SUBJECTS AND AUTHORS
Absenteeism, in the shipbuilding indus-
try, 33S
Accident insurance. See Working-
men's insurance
Accidents, care of, 171 ; estimates of,
22 ; in shops of Joseph and Feiss,
171; in shipbuilding industry, 330;
statistics of, 30-33; tax on, 81 •
Accounting. See Cost records
Acland, F. A., 782
Acton, Lord, 584
Adams, Henry, negro leader, 117
Adams, T. S., and Sumner, H. L.,
"Labor Problems," 389
Addams, Jane, 613
Adler, Edward A., "Labor, Capital
and Business at Common Law," 624
Ahrens, " Cours de droit naturel," 581
Alaska, workingmen's insurance in, 17
Alexander, M. W., "Apprenticeship in
the Metal Trades," xi, 233; "Hir-
ing and Firing," 156, 160
Alifas, N. P., objections to scientific
management, 144-149 ; trade-union
representative, x, 141
Alifas, N. P., and Taylor, F. W.,
"Scientific Shop Management," 141
Amalgamated Clothing Workers of
America, 535
Amalgamated Meat Cutters and
Butcher Workmen, 363, 366, 377,
384
Amalgamated Rubber Workers' Union,
379, S4S , . ^ X .
American Association for Labor Legis-
lation, "Three Years Under the New
Jersey Workmen's Compensation
Law," 41
American Association of Masters,
Mates, and Pilots, 352, 354
American Bottle Company, 472
"American Federation of Labor Re-
construction Program," xii, 562;
control of, 394; criticized, loi ; de-
velopment of, 349-361, 364-36S,
383, 386, 391-401- 436, 481 ; "Trade-
Unions versus Shop Committees,"
XI, 345
American Federation of Teachers, 360
American Labor Union, 393, 394
American Railway Union, 378
Andrews, J. B., and Commons, J. R.,
"Principles of Labor Legislation,"
ix, 763
Anthracite Coal Strike Commission,
xii, 49S-S24. 701
Anthracite industry, arbitration and
conciliation, 495-524
Anti-Boycott Association, 407, 431
Apprenticeship, 233-248
Aquinas, St. Thomas, 584
Arbitration, in anthracite industry,
495-524; in Australia, 667-693; in
Canada, 779-806; in Hart Schaff-
ner & Marx agreement, 536, 556; of
wages, 694-713. See also Concilia-
tion
Aristotle, "Nicomachean Ethics," 584;
"Politics," 593
Arizona, minimum wage in, 746-747
Arkansas, minimum wage in, 746-747,
760; workingmen's insurance in, 18
Arthur, P. M., 355
Askwith, Sir George, 780-781
Associated Brotherhood of Iron and
Steel Heaters, 363
Associations. See Corporations
Australia, conciliation and arbitration
in, 667-693 ; High Court of, xii
Australian Court of Conciliation and
Arbitration, xii
Awards in the anthracite industry,
495-524; in Australia, 682
Awards for accidents and injuries.
See Benefits, Workingmen's insur-
ance
Ayres, L. P., " Some Conditions Affect-
ing Problems of Industrial Educa-
tion," 150
Backhouse, Judge A. P., 708
Bailey, Justice, 599
Baker, J. S., "Profit-Sharing in the
Baker Manufacturing Company,"
xi, 263
Bakers' Union, 75
827
82 8 TRADE UNIONISM AND LABOR PROBLEMS
Baltimore Allied Printing Trades
Council, 386
Banks, nationalization of, in Russia,
186
Barbers' Union, 74, 75
Barnett, G. E., "Dominance of the
National Union in American Labor
Organization," xi, 386; "The Print-
ers," 389
Beneficiary societies. See Fraternal
beneficiary societies
Benefits, American workingmen's, 17-
44 ; British, 61 ; industrial, 284 ;
trade-union, 66, 71. See also Sickness
insurance, Workingmen's insurance
Bentham, Jeremy, "Theory of Legis-
lation," S80
Berger, Victor, 393
Bernhard, Ludwig, " Unerwiinschte
Folgen der deutschen Sozialpolitik,"
24
Berolzheimer, System der Rechts und
Wirthschaftsphilosophie, 582
Best, Chief Justice, 592
Bituminous industry, 525-533
Black, Chief Justice, 600
Blackstone, 585, 590
Blast Furnace Workers and Smelters,
381
Boilermakers and Iron Ship Builders,
354
Bolshevism, 179-198; propaganda of,
in United States, 2
Bonus systems, 199-264; in shipbuild-
ing, 316. See also Differential rates.
Premium systems. Profit-sharing
Book and job printing. See Printing
Industry
Boot and Shoe Workers' Union, bene-
fits in, 74-75, 78; policy of, 368,
399
Boycotts, as unions' weapon, 398
Bradley, Justice, 605
Brandeis, L. D., opinions and decisions
of, 625-626, 633, 636, 653-654, 656,
658-659, 661, 746
Brest-Litovsk Treaty, 188
Brewer, Justice, 618-627, 636
Brewery Workmen, 363, 377, 397
Bricklayers' and Masons' International
Union, 370-393
Bridge Tenders' Union, 358
Bridge and Structural Iron Workers,
407
Brissenden, P. F., "Labor Turnover
in the San Francisco Bay Region,"
151
British Labor Party, program of, xii
British Steel Smelters' Association, 70
Brotherhoods. See name of trade
Brown, Justice, 618
Brown, R. B., "The Men We Lodge,"
104
Bruce, Judge A. A., "The Illinois Ten
Hour Labor Law for Women," 632
Building trades, history of, 401; in
San Francisco, 477-488; violated
agreements of, 488
Building Trades Council, 364, 374-375.
401
Burgess, J. W., "Political Science and
Constitutional Law," 580
Burke, J. P., 221
Burke, W. M., "History and Func-
tions of Central Labor Unions," 398
Burlamaqui, "Natural Law," 590;
"Principles of Natural and Politic
Law," 581
Burnside, Justice, 703
Butler, F. X., "Profit-Sharing by
American Employers," 261
"Button strikes," 516
California, minimum wage in, 738-
778; workingmen's insurance in,
17-44
Canadian Industrial Disputes Investi-
gation Act, 779-806
Capitalism, credit system the basis of,
8; failure of, 12; modern beginning
of, 13
Carlton, F. T., "History and Prob-
lems of Organized Labor," 389
Carnegie Foundation for the Advance-
ment of Teaching, "Justice and the
Poor," 41
Carpenters and Joiners, 74, 378-379,
402
Carriage and Wagon Workers' Inter-
national Union, 381
Cartwright, Justice, 602
Casual labor, 107, 125-140. See also
Migratory labor
Cease, D. L., 356
Cessations, in anthracite industry, 513.
See also Stoppages
Chaney, Dr. L. W., and Hanna, H. S.,
"Accidents and Accident Preven-
tion in Machine Building," 330-332
Chicago Federation of Labor, 398
Chicago Teachers' Federation, 360
Child labor, in American Federation
of Labor program, 566; hours of,
615; turnover for, 157, i6i
INDEX OF SUBJECTS AND AUTHORS
829
Cigar Makers' International Union,
74-7S, 377
Citizens' Alliances, 407
Clark, E. E., 357
Clark, Dr. V. S., "Canadian Indus-
trial Disputes Investigation Act,"
781; "Labor Movement in Aus-
tralia," 708
Clarke, Justice, 636
Closed shops, in shipbuilding, 318
Cloth Hat and Cap Makers' Union, 75
Clothcraft Shops. See Joseph and
Feiss Company
Coal Operators' Association, 709
Coal-mining industry, anthracite, 495;
bituminous, 63s ; convention in, 3 ;
United States administration's fail-
ure in, 3-4
Cockburn, "Nationality," 592
Coke, "Second Institute," 585, 593
Collective bargaining, constitutionality
of> 635-666; effect of scientific
management on, 147; failure of,
2SS ; by founders, 406-432 ; in glass
industry, 458-476; by Hart Schaff-
ner & Marx, 534-561 ; by pattern-
makers, 489-494; plan for, 270-287;
rate fixing by, 216-217; in shipbuild-
ing, 318; by workshop committees,
293
Colorado, minimum wage in, 746, 749,
752 ; workingmen's insurance in, 38
Commons, J. R., "Bringing about
Industrial Peace," 1 ; at building-
trades hearing, 482-483, 486-487;
"Eight-Hour Shifts by Federal
Legislation," 807; "Health Pro-
gram," 81; "Industrial Goodwill,"
x; "Industrial Relations," i
Commons, J. R., and Andrews, J. B.,
"Principles of Labor Legislation,"
ix, 763
Commons, J. R., and assoaates,
"Documentary History of Ameri-
can Industrial Society," 387
Company unions, condemned by
American Federation of Labor, 346
Compensation. See Workingmen's
insurance
Competition, restrictions of, in ship-
building, 337
Composing-room Relief Association,
77
Compton, Wilson, "Wage Theories in
Industrial Arbitration," xii, 694
Compulsory arbitration. See Arbitra-
tion
Compulsory insurance. See Sickness
insurance
Conciliation, in anthracite industry,
495-524; in Australia, 667-693; in
Canada, 779-806 ; in Hart Schaff-
ner & Marx agreement, 556. See
also Arbitration
Connecticut, workingmen's insurance
in, 18-19, 25-27
Connecticut Federation of Labor,
workingmen's insurance opposed by,
19
Continuous industries, bill relating to,
821
Contract. See Liberty of contract
Cook, W. W., "Privileges of Labor
Unions in the Struggle for Life,"
657, 665
Cooperation, in American Federation
of Labor program, 566
Cooperation in industry, between
employer and employee, 288, 290,
300> 337; in Hart Schaffner & Marx
agreement, 534-561. See also Shar-
ing management
Cooperative welfare associations, 270-
287
Corporations, attacked, 13 ; beginning
of, 13, 14; regulation of, in Ameri-
can Federation of Labor program,
571
Corwin, S., "The Supreme Court
and the Fourteenth Amendment,"
632
Cost of living, in Australia, 687; of
miners, 3
Cost records, as production incenltives,
228; in Russia, 180
Courcelle-SeneuU, J. G., "Preparation
a I'etude du droit," 584
Creative instincts, as incentives, 218-
232, 289
Credit system, as basis of capitalism, 8
Crogman, Dr. W. H., on defects of
migration, 123; "Talks for the
Times," 116, 123
Cross, I. B., "San Francisco Building
Trades," xii, 477
Curtis, Justice, 593
Day, Justice, 612, 620, 636, 642-645,
647-648, 666
Deibler, F. S., "Patternmakers' Local
Agreements, Chicago," xii, 489
Dempsey, J. T., 516
Dennison Manufacturing Company,
reduction of turnover by, 163-164
830 TRADE UNIONISM AND LABOR PROBLEMS
Detectives, employers', 429
Diamond Workers' Union, 75
Dicey, A. V., "Law and Public
Opinion in England," S82, 610, 624
Dictatorship in Russia, 179-198
Differential rates, deiinition of, 200-
201. See also Bonus systems. Pre-
mium systems. Profit-sharing
Discipline, in shops of Hart Schaff-
ner & Marx, 558 -
District of Columbia, minimum wage
in, 746, 750-751, 754; workingmen's
- insurance in, 17-18
Doctors, new profession of, 81-93
Dos Passes, J. R., "The American
Lawyer," 590
Douglas, D. W., "American Minimum-
Wage Laws at Work," xii, 738;
"Standard of Living for Working
Women," 774
Douglas, P. H., "Problem of Labor
Turnover," 150
Douglas, P. H., and Wolfe, F. E.,
"Labor Administration in the Ship-
building Industry during War
Time," xi, 311
Dublin Typographical Society, 390
Dunning, W. A., "Political Theories,"
S84
Eager, Almeron, on profit-sharing,
263
Eastern League of Green Glass Bottle
Blowers, 458
Education, in American Federation of
Labor program, 572 ; factory, 297-
298; of lawyers, 590. See also Fac-
tory schools. Industrial education,
Vocational education
Efficiency, correlation of departments,
17s; eight-hour shifts, 807-823; in
hiring, 166; incentives to, 218-232;
need of personal relations for, 12 ;
principles of, 141 ; profit-sharing,
256, 260; in Russia, 179-198; in
shops of Joseph and Feiss, 178;
specializing, 289. See also Bonus
systems, Cooperation in industry.
Differential rates, Mental tests.
Piecework, Premium systems. Profit-
sharing, Sharing management. Time
studies
Elections and appointments in indus-
try, 297
Electrical Workers, 354, 377
Eliot, Dr. C. W., "Profit-Sharing
and Scientific Management," 250;
"Profit-Sharing in the United
States," 250; "The Road to Indus-
trial Peace," 250, 262
Elliott, Justice, 612
Ellis Island Immigration Station, 104
Ellison, Judge, (197
Ely, R. T., "Economic Theory and
Labor Legislation," 579
Emergency Fleet Corporation, labor
administration of, xi, 311-344
Emerson, Harrington, on bonus sys-
tems, 202-204
Emmet, Boris, "Labor Turnover in
Cleveland and Detroit," 151; "Labor
Turnover and Employment Poli-
cies," 333 ; " Nature and Computa-
tion of Labor Turnover," 153;
Profit-sharing in the United States, ,
xi, 164, 249
Employers, classes of, iS; misrepre-
sentation of labor by, 2 ; moral re-
sponsibility of, 175, 260
Employers' associations, in buUding-
trades conflicts, 477-488; founders,
406-432, 433-457; glass-bottle agree-
ment, 458-476
Employers' liability. See Sickness in-
surance, Workingmen's insurance
Employment, insecurity of, ix, 7;
need of security of, 9. See also
Unemployment
Employment bureaus, 134-140; in
American Federation of Labor pro-
gram, 573; centralization of, 137,
162; failure of, 134; need of, 135;
in shipbuilding, 325; in shops of
Joseph and Feiss, 166
Employment managers, cities and
companies having, 163
Equality of rights, 588
Erdman Act, 699, 702
Factory inspection, new functions of,
9, 83
Factory schools, need of, 297. See
also Industrial education. Voca-
tional education
Farm Colony of Department of Pub-
lic Charities, 104
Federation of Organized Trades and
Labor Unions, 390
Fee, Grant, on building trades, 4S4,
486-487
Feiss, R. A., "Personal Relationship
as a Basis of Scientific Manage-"
ment," x, 165
Fichte, "Theory of Legislation,". 580
INDEX OF SUBJECTS AND AUTHORS
831
Field, H. M., "Life of David Dudley
Field," 596
Field, Justice, 591, S9S-S96, 60s, 609
Figgis, "From Gerson to Grotius,"
S84
Firemen's Union, 358
Fisher, Boyd, "How to Reduce the
Labor Turnover," 156; "Methods
of Reducing the Labor Turnover,"
IS7
Fisher, Irving, "Stabilizing the Dol-
lar," s
Fisher, W. C, "American Experience
with Workmen's Compensation," ix,
17
Fitch, J. A., "Making the Boss Effi-
cient," iS7
Fleming, W. L., ""Pap' Singleton: the
Moses of the Colored Exodus," 117
Flint Bottle Manufacturers' Associa-
tion, 462
Flint Glass Workers, 393, 397
Floating laborers. See Migratory
labor
Florida, 18
Fluctuations, prevention of, 17s
Ford Motor Company, a psychologi-
cal miracle, 11; turnover in, 156,
160, 163
Foremen, election and promotion of,
297
Foundry Employees' Union, 75, 381,
427
Foundry workers, struggles of, 406-
43 2 > 433-4S7
Framingham, demonstration in, 88
Frankfurter, Felix, "Hours of Labor
and Realism in Constitutional Law,"
xii, 614
Frankfurter, Felix, and Goldmark, J.,
"Oregon Minimum Wage Brief,"
Fraternal beneficiary societies, British,
47; of marine engineers, 352; of
post-office employees, 350; of rail-
road employees, 355
Freedom of contract. See Liberty of
contract
French Revolution, individual bargain-
ing, j6; overthrow of old systems,
13-14
Freund, Ernst, " Constitutional Limita-
tions and Labor Legislation," 632-
633 ; " Limitations of Hours of
Labor and the Federal Supreme
Court, 614, 632; "Police Power,"
622
Friendly societies. See Fraternal bene-
ficiary societies
Fuller, Chief Justice, 636
Gantt, H. L., 203, 204; "Bonus Sys-
tem of Rewarding Labor," 201
Garment Workers' Union, 74
General Electric Company, apprentice-
ship system of, xi, 233-248; turn-
over in, 156
George, Lloyd, and health insurance,
45; and the policemen's strike, 359
Georgia, 18
German-American Typographia, 74
Gilman, N. P., "Profit-Sharing be-
tween Employer and Employee,"
250
Glass House Employees, 381
Glass Vial and Bottle Manufacturers,
458, 463, 465-466
Glocker, T. W., "Amalgamation of Re-
lated Trades in American Unions,"
xi, 362 ; " Government of American
Trade Unions," 389
Goldmark, Josephine, "Fatigue and
Efficiency," 624-625, 628-629, 740
Goldmark, Josephine, and Frank-
furter, F., "Oregon Minimum Wage
Brief," 740
Gompers, Samuel, and employers'
liability, 19; and industrial peace,
12
Good wiU, developed by profit-
sharing, 260, 269
Goodrich Tire and Rubber Company,
turnover in, 157
Gordon, Justice, 703
Gould Coupler Co., 446
Government ownership in American
Federation of Labor program, 569
Granite Cutters' Union, 74
Gray, George, 512-513, 524
Great Britain, health insurance in,
45-55; unemployment insurance in,
56-70
Greeley, L. N., "The Changing Atti-
tude of the Courts toward Social
Legislation," 632
Green Glass Bottle Blowers, 397, 458-
476
Gregg, R. C, "Method of Handling
the Problem of Labor Turnover,"
157. 163
Grievances, in Hart Schaffner & Marx
agreement, 537, 540; settlement of,
495-524; and workshop committees,
29s
832 TRADE UNIONISM AND LABOR PROBLEMS
Grieves, W. A., "The Handling of
Men," 156, 160
Grotius, "De Jure Belli et Pacis,"
S81, SQO, S93 . , , „ . ,
Guyot, Yves, "Prinaples of Soaal
Economy," 584
Halsey, F. A., 199, 203-204
Halsey, O. S., "British National Sys-
tem of Unemployment Insurance,"
ix, 56; "Compulsory Health In-
surance in Great Britain," ix, 45
Hammond, M. B., 711; "Australian
Experience with Wage Boards," 706-
707
Hand, Judge Learned, 634; "Due
Process of Law and the Eight-Hour
Day," 614, 632
Hanna, H. S., and Chahey, L. W.,
"Accidents and Accident Preven-
tion in Machine Building," 330-
332
Harlan, Justice, 591, 593, 606, 620,
636-640; on equality of rights, 588;
on liberty of contract, 579
Hart Schaffner & Marx labor agree-
ment, xii, 534
Hawaii, 17, 20
Hayden, Justice, 704, 711
Hayes, president of the Glass Bottle
Blowers' Association, 460, 474-475
Health. See Public health
Health insurance. See Sickness in-
surance
Henderson, Professor, 588
Henley, Lord Keeper, 608
Higgins, H. B., 628, 702-703, 70S; "A
New Province for Law and Order,"
xii, 667
Hiring and firing, 166. See also Effi-
ciency, Employment bureaus
Hiscock, Judge, 622
Hoboes, See Migratory labor
Hobson, J. A., "Work and Wealth,"
629
Hod Carriers and Building Laborers,
381-382
Hoffman, F. L., "Facts and Fallacies
of Compulsory Health Insurance,"
8s; on injuries, 22, 33
Holmes, Justice, 598, 606, 614, 620-
621, 623, 631, 636, 640-644, 646,
648-650, 663; "The Path of the
Law," 590; on police power, 21
Holt, Lord, 609
Homeless. See Migratory labor
Hookstadt, Carl, 43
Hopkins, E. M., turnover estimates of,
158
Hotel & Restaurant Employees' Union,
7S
Hours of labor, in American Federa-
tion of Labor program, S65 ; coal
mining, 3 ; constitutionality of, 614-
634; in dangerous employments,
618; eight-hour shifts, 807-823;
one-day rest, 622; in shipbuilding,
316; in shops of Joseph and Feiss,
178
Housing, in American Federation of
Labor program, S74
Howard, E. D., SSSI "The Develop-
ment of Government in Industry,"
S34
Hubbard, Justice, 593
Hughes, Justice, 617, 636, 648
Illinois, 17, 20, 23, 25
niinois Coal Operators' Association,
525, 528, 531
Immigration, in American Federation
of Labor program, 572; anthracite
industry affected by, 508; labor
market affected by, 126
Income tax in Russia, 187
Independent Workers' Federation, 678
Industrial Accident Boards and Com-
missions, 34
Industrial accidents. See Accidents.
Industrial Assembly, 388
Industrial Congress, 388
Industrial Disputes Investigation Act
of Canada, 779, 806
Industrial education in shipbuilding,
326. See also Factory schools, Voca-
tional education
Industrial efficiency. See Efficiency
Industrial evolution, effects of, 221
Industrial relations, 1-16
Industrial revolution, effects of, 150
Industrial welfare, need of, 306
Industrial Workers of the World, loi-
102, 363, 377, sii; decline of, 394;
split in, 364
Injuries. See Accidents
Insecurity of employment. See Em-
ployment
Insurance. See Life insurance, Mater^
nity insurance, Sickness insurance,
Unemployment, Workingmen's in-
surance
International associations, brother-
hoods, and unions. See name of
trade
INDEX OF SUBJECTS AND AUTHORS
^33
International Harvester Company,
records of, 31
Iowa, 20
Iredell, Justice, 591
Iron Holders. See Molders
Iron and Steel Roll Hands, 363
Iron and Steel Workers' Union, 75
Janes, G. M., "Tendencies in Trade-
Union Development," xi, 349
Jeffrey Manufacturing Company, 156
Jellinek, "System der subjectiven
offentlichen Rechte," 580
Joseph and Feiss Company, labor
policy of, 165-178
Journeymen, history of, 72
Journeymen Plumbers, 371
Jurisprudence, 583
Juveniles. See Child labor
Kansas, minimum wage in, 738-778;
workingmen's insurance, 17, 20, 43
Kelley, Mrs. Florence, "Some Ethical
Gains through Legislation," 599
Kellogg, F. W., 488
Kennaday, P., 711
Kennedy, J. B., "Beneficiary Features
of American Trade Unions," 389
Kentucky, 20, 37
Kerensky, abdication of, 179
Kirk, William, "National Labor
Federations in the United States,"
390, 401
Knights of Labor, 393, 4S9; failure of,
383; in glass-bottle industry, 459;
growth of, 390-391 ; organization of,
388
Labor, classification of, 129; defect
of organization of, 16; employers'
misrepresentation of, 2. See also
Liberty of contract, and special
topics
Labor unions, amalgamation of trades
in, 362-38S; development of, 349-
361; discipline of, SS8; dominance
of national, 386-405 ; in glass-bottle
industry, 458-476; of patternmak-
ers, 489-494; preference to, 545,
678; recognition of, 557; right to
membership in, 603, 636, 651 ; right
to organize, 563; struggles of, 406-
432, 433-457; violated agreements
of, 5, 488. See also names of
unions
Laborers' Union Protective Society,
382
Lackawanna Steel Company, 815
Lake Carriers' Association, 97
Lamar, Justice, 636
Land, in American Federation of
Labor program, 570
Lauck, W. J., and Sydenstricker,
Edgar, "Conditions of' Labor in
American Industries," 259
Lawyers, training- of. See Education
Leather Workers on Horse Goods
Union, 74
Legislation, in American Federation of
Labor program, 567
Lenin, Nikolai, despotism of, x;
"Scientific Management and Dic-
tatorship of the Proletariat," 179
Le Rossignol, J. E., "Compulsory
Arbitration in New Zealand," 706
Lescohier, D. D., "A Clearing House
for Labor," ix, 125
Letter Carriers, 350
Liberty bonds, workingmen's disposal
of. 3
Liberty of contract, constitutionality
of, 579-613. 642
Lieber, "Civil Liberty and Self-Gov-
ernment," 580
Life insurance, industrial, 283, 285
Lloyd George. See George, Lloyd
Locomotive Engineers, 355, 369, 393
Locomotive Firemen and Enginemen,
355-3S6, 393
Lodging houses. See Municipal Lodg-
ing House
London Compositors Union, 390
London Society of Compositors, 70
Louisiana, 20
Lowell, J. R., quotation from, 690-
691
Lumber camps, evils of, 96
Lynch, J. M., "Trade-Union Sickness
Insurance," ix, 71
McCabe, D-. A., "Premium and Bonus
Systems of Payment," x, 199; "The
Standard Rate in American Trade
Unions," 389, 448
McCarthy, P. H., 482-483, 485-487
Machinists' Union, 74, 354, 377, 407
Macintosh, "Discourses on the Study
of the Law of Nature and Nations,
590
McKenna, Justice, 636-640
MacNary, E. E., 327
McReynolds, Justice, 636
McShane, Henry, Manufacturing Com-
pany, 446
834 TRADE UNIONISM AND LABOR PROBLEMS
Macy, V. E., 314; "Shop Committees
and Unions," 320
Magruder, Justice, on employers'
rights, 603; on liberty of contract,
604 ; on women's rights, 601
Maine, Sir Henry, 708; "Ancient
Law," 581
Manufacturers' associations, 407, 431
Marine engineers, 352, 354
Marshall, Chief Justice, 581, sgi, 651
Marx, Karl, on capitalism, 14; on
social labor power, 12 ; theories of,
191
Maryland, 31
Massachusetts, minimum wage in, 738-
778; workingmen's insurance in, 17-
44
Master workmen, history of, 72
Maternity insurance, British, 47, 54
Medical ethics. See Doctors
Medical examination, in Framingham,
88; in shops of Joseph and Feiss,
170; of unemployed, 105; at Uni-
versity of Wisconsin, 89
Meeker, Royal, 629
Mensheviks, 181, 184, 188
Mental tests, in shops of Joseph and
Feiss, 173
Merchant capitalist, history of, 72
Metal Trades, x, 365, 375, 406
Metal trades, apprenticeship in, 233-
248
Mexican Revolution, 99
Meyer, Carl, 536
Michigan, 20, 38
Migratory labor, 94-103, 104-114;
causes of, 131; negroes, 115-124;
types of, 127, 130
Militarism, affected by hours of labor,
816; in American Federation of
Labor program, 574
Mill, J. S., "Liberty," 582, 610;
"Political Economy," 585
Miller, Justice, 591
Mine workers, in anthracite industry,
49S-524; in bituminous industry,
525-533; under Canadian Act, 794
Minimum wage, American laws for,
738-778; in Australia, 669; in Hart
Schaffner & Marx agreement, 543 ;
for women, 714-737
Minnesota, minimum wage in, 738-
778; workingmen's, insurance in,
20, 42
Misrepresentation of labor by em-
ployers, 2
Mississippi, 18
Mitchell, John, 502, 527, S30
Mitten, T. E., and profit-sharing, xi,
271
Mixter, C. W., "Protection of Piece
Rate," xi, 205
Molders, 75, 363, 377; sick benefits of,
74, 78; struggles of, 406-432, 433-
457
Montana, 20, 39
Montesquieu, "Lettres persanes," 581
Moral responsibility of employers, 17s,
260
Morrison, Frank, 394
MuUenbach, James, 537
Municipal Lodging House, 104-114
National associations, fedei"ations, and
unions. See name of trade
National Civic Federation, "Profit-
Sharing by American Employers,"
256
National Council for Industrial De-
fense, 431
National Erectors' Association, 407
National Founders' Association, strug-
gles of, 406-432, 433-457
National Labor Union, 388
National Trade Assembly, 459
National Tuberculosis Association, 92
Natural rights, 581
Nebraska, minimum wage in, 746,
748, 752 ; workingmen's insurance in,
44
Negroes, migration of, 115-124
Neill, C. P., 512, 520-522
Newark Building Trades Council, 403
New Hampshire, 20, 44
New Jersey, 20, 38, 41
New York, 17, 20, 22, 24, 25, 31, 34
North, S. N. D., "Industrial Arbitra-
tion," 712
North Carolina, 17
North Dakota, minimum wage in, 746-
750; workingmen's insurance in, 18
Northington, Lord, 597, 608
O'Brien, Justice, 585, 604
Ohio, workingmen's insurance m, 17,
20, 25-28, 34, 37
Old-age pensions, 284
One-day rest, 815; constitutionality
of, 622
Ontario, 22-23
Oregon,^ minimum wage in, 738-778;
workingmen's insurance in, 20, 25, 42
Orr, J. L., on negro migration, 115
Overtime in shipbuilding, 316-317
INDEX OF SUBJECTS AND AUTHORS
83s
Pacific Telephone and Telegraph Com-
pany, turnover in, 157
Painters' Union, 75
Paley, "Moral and Political Philoso-
phy," S90
Parker, Carleton, "The California
Casual and his Revolt," 158
Pattern Makers' Association of Chi-
cago, 48g-494
Pattern Makers' Union, 74, 75
Paupers. See Poor
Peckham, Justice, 60s, 618, 620, 627,
636
Pennsylvania, worklngmen's insurance
in, 17-44
Personal relations, need of, 12
Persons, C. E., "Women's Work and
Wages in the United States," 715,
722
Pfahler, W. H., "History of the
National Founders' Association," 409
Philadelphia Rapid Transit Com-
pany, "A Plan for Collective Bar-
gaining and Cooperative Welfare,"
xi, 270-287
Photo Engravers' Union, 75
Piano and Organ Workers' Union, 74
Piecework, 205-217; in Australia, 676;
evils of, 14s; joint agreements for,
293; union cooperation regarding,
216
Piez, Charles, 317
Pitney, Justice, 636, 639, 645-646, 655-
663, 665
Plato, "Republic," 584
Plimpton Press, turnover of, 157, 163
Plumb, Fayette R., Company, 160
Plumb plan, 8
Plumbers' Union, 74-75, 354
Pocket Knife Blade Grinders' Union,
75
Police power, 21
Policemen, strike of, 358-359
Political parties, in American Federa-
tion of Labor program, 568
Pollock, Sir Frederick, 606; "The
New York Labor Law and the
Fourteenth Amendment," 632
Poor, British, 54
Porto Rico, minimum wage in, 746,
747; worklngmen's insurance in, 17
Post-office employees, unions of, 350
Pound, Roscoe, " Common Law and
Legislation," 592-593; "Legislation
as a Social Function," 634; Liberty
of Contract, xii, 579
Poverty. See Poor
Powell, T. R., "Collective Bargaining
before the Supreme Court," xii, 635
Preferential shops, in Australia, 678;
in Hart Schaffner & Marx agree-
ment, 545
Premium systems, 199-204; evUs of,
14S. See also Bonus systems, Differ-
ential rates, Profit-sharing
President's Industrial Conference, 12
Prices, fluctuations of, 4
Printing industry, cost of living and
wages in, 5
Printing Trades Association, 386
Production, incentives to, 218-232
Profit-sharing, 249-262 ; in the Baker
Manufacturing Company, 263-269;
in the Ford Motor Company, 11;
labor affected by, 255-257; turnover
affected by, 164. See also Bonus
systems. Differential rates, Premium
systems
Promotions, in industry, 297
Psychological tests, in shops of Joseph
and Feiss, 173
Psychology of labor, 7
Public health, accident and sickness
prevention, 81-93; industrial, 171;
in shipbuilding, 329
Public safety, in shipbuilding, 329
Public utilities, in American Federa-
tion of Labor program, 569
Puffendorf, 590; "Law of Nature and
Nations," 581
Pulp Sulphite and Paper Mill Work-
ers' Union, 221
Quarry Workers' International Union,
377
Railroad Brakemen, 356
Railroad employees, Canadian, 795 ;
union development of, 355
Railroad Telegraphers, 358
Railroad Trainmen, 355, 356, 377, 393,
699
Railway Conductors, 355-356, 369,
393, 699
Railway Mail Association, 350
Railway Postal Clerks, 350
Reconstruction, American Federation
of Labor program of, 562-578
Records, importance of, 31 ; in Joseph
and Feiss Company, 168
Recreation, need of, 306
Red Guard, Russian, 182
836 TRADE UNIONISM AND LABOR PROBLEMS
Reeves, W. P., "State Experiments in
Australia and New Zealand," 713
Rehabilitation, in American Federa-
tion of Labor program, 576
Renold, C. G., "Workshop Commit-
tees," xi, 288
Restriction in industry, of hours, 3;
of output, 6, S31
Retail Clerks' Union, 75
Rhode Island, 20
Ricardo, "Principles of Political
Economy," 585; "Works," 582
Ritchie, D. C, "Natural Rights," 582
Roosevelt Anthracite Coal Strike Com-
mission. See Anthracite Coal Strike
Commission
Rousier, Paul de, "The Labor Ques-
tion in Britain," 150
Russian Soviet Republic, collective
bargaining in, 16; confiscation of
factories by, x; French Revolution
compared with, 14; misconceptions
in, X, 8; scientific management in,
179-198
Rutherforth, "Natural Law," 593
Safety. 5ee Accidents, Public safety
Sakolski, A. M., "Finances of Ameri-
can Trade Unions," 389
San Francisco Building Trades Coun-
cil, 477-488. See also Building
trades
San Francisco Planing Mill Owners'
Association, 486
San Francisco Trades and Labor
Assembly, 397
Sanitation, in shipbuilding, 329
Schloss, D. F., "Methods of Indus-
trial Remuneration," 250
Scholfleld, Justice, S97-598
Schouler, James, "Ideals of the Re-
public," 590
Scientific management, and collective
bargaining, 147; old and new, x,
141-149, 16S-178, 179-198
Scott, W. D., psychological tests by,
173
Scottish Typographical Association, 390
Scroggs, W. O., "Interstate Migration
of Negro Population," 115
Seager, H. R., "Introduction to
Economics," 579, 583, S89; on mini-
mum wage, 717; psychological tests
by, 173
Seamen's Union, 377, 383, 399
Seasonal labor, 107, 125-140. See also
Migratory labor
Security of employment. See Employ-
ment
Seniority, in Hart Schaffner & Marx
agreement, 546
Sharing management, meaning of,
297; in shipbuilding, 337; through
shop committees, 288. See also
Cooperation in industry
Sheldon, Justice, 596
Shingle Weavers' Union, 75
Shipbuilding Labor Adjustment Board,
administration of, 311-348
Shop committees, 288-310; in Hart
Schaffner & Marx agreement, 539;
relation of, to uijions, 300, 319, 345-
348; in shipbuilding, 318
Shop stewards, 303
Sick benefits. See Benefits
Sickness, prevention of, 85; tax on, 82
Sickness insurance, British, 45-SS ; as
tax, 81-93 ; in trade-unions, 71-80.
See also Benefits, Fraternal bene-
ficiary societies
Sidgwick, Henry, "Elements of Poli-
tics," 582, 610
Singleton, Benjamin, negro leader, 117
Smith, Adam, 13, 16; "Wealth of
Nations," 582
Snow, Freeman, "Cases on Interna-
tional Law," 592
Social welfare. See Industrial welfare
Socialism, criticized, loi ; in Russia,
183, 186, 189-190, 197
Social-Revolutionists of the Right,
Russian, 181, 184, 188
Solidarity, of labor, 11, 15; of trades,
362-38S
Sons of Vulcan, 363
South Carolina, 17
Soviets. See Russian Soviet Republic
Specialization in industry, effect of,
on creative work, 222, 289
Spedden, E. R., "The Trade Union
Label," 389
Speek, P. W., "Autobiographies of
Floating Laborers," ix, 94
Spencer, Herbert, 582 ; " Justice," 580,
610; "Social Statics," 606
Spretson, N. E., "A Practical Treatise
on Casting and Founding," 437
Squires, B. M., "Operation of the In-
dustrial Disputes Investigation Act
of Canada," xiii, 779
Stabilizing the dollar, need of, 4, 6
Standardization, in shops of Joseph
and Feiss, 166
Stationary Engineers, 360
INDEX OF SUBJECTS AND AUTHORS
837
Stecker, M. L., "The Founders, the
Molders, and the Molding Machine,"
xi-xii, 433; "National Founders
Association," xi-xii, 406
Steel and Copper Plate Printers'
Union, 75
Stewards. See Shop stewards
Stewart, Ethelbert, "Equalizing Com-
petitive Conditions," xii, 525; turn-
over estimates of, 158
Stillman, C. B., 360
Stock-sharing with employees, 262,
264, 267
Stonecutters' Union, 75
Stoppages, in Hart Schaffner & Marx
agreement, S47. See also Cessations
Stotesbury, E. T., 270
Stove Founders' National Defense
Association, 406-407, 409, 419, 424,
428, 456
Strikes, as affected by Canadian Act,
779-806; in anthracite industry,
515; assessments for, 399; in Aus-
tralia, 691 ; in bituminous industry,
525; "button," 516; constitutional-
ity of, 656 ; development of, in
unions, 349-361; of molders, 411;
of patternmakers, 493 ; sympathetic,
362-38S
Structural Building Trades Alliance,
37S, 401
Suffern, A. E., "Conciliation and
Arbitration in the Coal Industry,"
699
Sumner, H. L., and Adams, T. S.,
"Labor Problems," 389
Swayze, Justice, "The Growing Law,"
633
Swift and Company, turnover m, iS7
Switchmen's Union, 369
Sydenstricker, Edgar, "Settlement of
Disputes under Agreements in the
Anthracite Industry," xii, 495
Sydenstricker, Edgar, and Lauck, W.
J., "Conditions of Labor in Ameri-
can Industries," 259
Sydenstricker, Edgar, and Warren, B.
S., "Health Insurance," 155
Sylvis, W. H., 439
Sympathetic strikes. See Strikes
Tailors' Union, 75
Taney, Justice, 651
Taussig, F. W., " Investors and Money
Makers," 629; "Minimum Wages
for Women," xii, 714; "Principles of
Economics," 721
Tawney, R. H., "Minimum Rates in
the Tailoring Industry," 631
Tax on accidents, 8i
Tax on sickness, 82
Tax on unemployment, 10
Taxation, in American Federation of
Labor program, 572
Taxes, collection of, in Russia, 187
Taylor, F. W., 10; on differential rates,
200, 203, 204 ; on scientific manage-
ment, X, 141-149
Taylor, F. W., and Alifas, N. P.,
"Scientific Shop Management," 141
Taylor, Hannis, "Science of Jurispru-
dence," 579
Teachers, unions of, 359
Texas, minimum wage in, 746, 750,
752, 777; workingmen's insurance in,
20
Thayer, E. R., "Legal Essays," 623
Thiel, C, 3S9
Thompson, W. O., S36
'Time studies, difficulties of, 208; evils
of, 14s; value of, 211
Tobacco Workers' Union, 74, 75
Trade-unions. See Labor unions
Travelers' Goods and Leather Novelty
Workers' Union, 75
Treiber,E., " Foundry Machinery," 437
Trotsky, Leon, 179
Tuberculosis, in Framingham, 88 ; pre-
vention of, 89
Turnover of labor, x, 150-164; causes
of, 127; cost of, ^35; in Joseph and
Feiss Company, 163-164, 177; effects
of profit-sharing on, 260, 269; in
shipbuilding, 332
Typographical Association (English),
390
Typographical Union, International,
ix, 367, 377, 386, 390> 39i, 392; sick
benefits of, 74, 76; split in, 362, 368,
371, 380
Unemployment, 125-140; in American
Federation of Labor program, 563 ;
causes of, 108; classification of, 106,
108; elimination of, profitable, 9;
insurance against, 56-70; tax on, lo
Union Printers' Home, 74
Union Printers' Mutual Aid Society, 76
Unions. See Labor unions
United associations and brotherhoods.
See name of trade
United Mine Workers of America, 363,
377, 49S-496, 498, Soo, 516, 524,
52s, 539, 660, 664, 709
838 TRADE UNIONISM AND LABOR PROBLEMS
United States Bureau of Labor Statis-
tics, "Effect of Workmen's Com-
pensation Laws in Diminishing the
Necessity of Industrial Employment
of Women and Children," 27
United States Bureau of Mines, 29
United States Geological Survey, 514-
■S15
United States Industrial Relations
Commission, 94
United States Steel Corporation, Bol-
shevistic propaganda of, 2 ; against
eight-hour day, 814; records of, 31
University of Wisconsin, medical
supervision in, 89
Usury, 609
Utah, minimum wage in, 746, 747, 752
Van Devanter, Justice, 636
Virginia, 37
Vocational education, need of, 233.
See also Factory schools, Industrial
education
Wages, adjustments of, 231 ; in Ameri-
can Federation of Labor program,
564; arbitration regarding, 694-713;
in Hart Schaffner & Marx agreement,
553; of Joseph and Feiss Company,
178; methods of payment of, 205;
of miners, 3 ; of patternmakers, 492 ;
in printing industry, 5 ; of Philadel-
phia Rapid Transit Company, 274;
under scientific management, 147 ; in
shipbuilding, 311, 322
Walker, F. A., 725
War Labor Board, 272, 274
Ward, L. F., "Applied Sociology," .i;79
Warne, F. J., " Trade Agreement in the
Coal Industry," 498
Warren, B. S., and Sydenstricker,
Edgar, "Health Insurance," 155
Washington, minimum wage in, 738-
778; workingmen's insurance in,
17-44
Washington, Dr. B. T., on migration
of negroes, 115
Webb, Sidney and Beatrice, 212, 717;
"History of Trade Unionism," 349;
"Industrial Democracy," 696, 697,
708
Weinstein, S. B., "Oregon Minimum
Wage Law," 768-769
Weinstock, Harris, 485-486
Welfare. See Industrial welfare
Werner, Justice, 613
West, T. D., 435
West Virginia, 20, 22, 31, 39
Westerri Federation of Miners, 75, 363,
377, 394 ■
Wheaton, G. S., 356, 581
White, Chief Justice, 620, 636
White Motor Company, 11
White Rats Actors' Union, 75
Wigmore, J. H., "The Qualities of
Current Judicial Decisions," 632
Willetts, J. H., "Development of Em-
ployment Managers' Associations,"
163; "Steady Employment," 157
Williams, J. C, "The Reduction of the
Turnover of the Plimpton Press," iS7
Wniiams, J. E., 534, 536
Williams, J. M., "An Actual Account
of what we have done to Reduce
our Labor Turnover," 160
WUloughby, W. W., "Political Theories
of the Ancient World," 584
Window-Glass Workers' Union, 362
Wire Weavers' Union, 75
Wisconsin, minimum wage in, 738-
778; workingmen's insurance in,
17-44
Wolf, R. B., " Nonfinancial Incentives,"
xi, 218
Wolife, F. E., "Admission to American
Trade Unions," 389
Wolfe, F. E., and Douglas, P. H.,
"Labor Administration in the Ship-
building Industry during War
Time," xi, 311
Wolman, Leo, "Collective Bargaining
in the Glass-Bottle Industry," xii,
458; "The Extent of Labor Organ-
izations in the United States," 436
Women, in American Federation of
Labor program, 565 ; hours of labor
of, 615; rights of, 600-601
Wood Workers' Union, 74
Workers' Union, 70
Workingmen's insurance, 17-44; com-
pulsory, 20; constitutionality of,
20-21; humane aspect of, 40-41;
optional, 20; states having, 17; un-
organized workers benefited by, 80
Workshop committees. See Shop com-
mittees
Wright, C. D., "Practical Sociology,"
512, 520-521, 579, 588
Wyoming, 20
Yates, W. F., 352
Zeller, Eduard, "Aristotle and the
Earlier Peripatetics," 584
KF 3389 A2 C73
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Commons, John Rogers 1
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